MNI BRIEF: US 1Q GDP Slows To -0.3%, Core PCE Inflation 3.5%

U.S. GDP growth contracted in the first quarter at a -0.3% annual rate, dragged down by surging imports as firms tried to get ahead of President Trump's tariffs, the Bureau of Economic Analysis said Wednesday in its advance estimate. Wall Street forecasts were centered around a -0.2% contraction but were as low as more than 2%. 

Goods imports contributed -4.8% to the headline figure, the BEA said. Consumer spending slowed to a 1.8% increase from 4.0% in the fourth quarter as durable goods purchases fell sharply. Businesses stocked up inventories and net exports declined. 

Real final sales to private domestic purchasers, which measures underlying demand in the economy, surged 3.0%, a tenth above the fourth quarter figure. 

Headline and core PCE inflation, the Fed's preferred measures of consumer prices, accelerated to 3.6% and 3.5%, respectively for the quarter, from 2.4% and 2.6% in the fourth quarter. (See: MNI INTERVIEW: Fed On Hold For A While, Rate Direction Unclear )