BEA Reports U.S. Real GDP in Q1 2025 Declined at an Annual Rate of 0.5% in its Third Estimate

On Thursday, the Bureau of Economic Analysis (BEA) released its third estimate for Q1 of 2025, real gross domestic product (GDP). According to the report GDP declined at an annual rate of 0.5%. in Q1 of 2025. This follows a reported real GDP increase of 2.4% in Q4 of 2024.

Compared to Q4 of 2024, the downturn in real GDP in Q1 of 2025 primarily reflected an upturn in imports, a deceleration in consumer spending, and a downturn in government spending that were partly offset by an upturn in investment.

Real GDP was revised down 0.3% percentage points from the agency’s second estimate, primarily reflecting downward revisions to consumer spending and exports that were partly offset by a downward revision to imports.

The BEA reports that the price index for gross domestic purchases increased 3.3% in Q1 2025, revised downwardly 0.1% from the “Advance” estimate. The personal consumption expenditures (PCE) price index increased 3.6%, the same as previously estimated. Excluding food and energy prices, the PCE price index increased 3.4%, revised downwardly by 0.1% from the advance estimate.

Real final sales to private domestic purchasers, the sum of consumer spending and gross private fixed investment, increased 1.9% percent in Q1 2025, revised down 0.6 percentage point from the previous estimate.