What to Expect from This Week’s GDP Report

Takeaways

• The U.S. economy is expected to grow at a rate of only 0.3% annually in the first quarter. This is a dramatic slowdown compared to the 2.4% growth in the previous quarter.
• If it materializes, the slowdown would likely reflect the impact of a surge of imports: People raced to buy things ahead of President Donald Trump's tariffs, and imports count against GDP growth.
• The slowdown would be one of the first "hard data" indicators showing the tariffs' economic impact.

President Donald Trump's tariffs have been slow to affect hard economic data, but that could change Wednesday when the import taxes could blow a hole in the Gross Domestic Product figures.

According to the median forecast of a survey conducted by Dow Jones Newswires and the Wall Street Journal, Wednesday’s scheduled report on GDP is likely to show the key measure of economic output in the United States rose at a rate of only 0.4% annually in the first three months. This would be the lowest growth rate since 2022 and down from 2.4% during the last quarter in 2024.

Economists believe that the sharp growth slowdown is likely to be due to the surge in imports. People bought more goods from abroad before President Donald Trump’s new tariffs came into effect. Imports also reduce the GDP. Some economists even lowered their estimates after a record number of imports was reported on Tuesday.

Some forecasters believe the drop will even be more drastic than the consensus, and expect the economy shrink for the first since 2022. The Federal Reserve Bank of Atlanta’s GDP Now tool calculates GDP based on the economic data that is published. It showed the GDP shrinking by 2.5% annually in the first quarter.

The GDP report is one of the first “hard” data indicators that will show the impact Trump’s tariffs on U.S. trading partner countries, which began February and reached fever pitch in late April. Surveys show that businesses and individuals are growing more pessimistic because of the tariffs. However key economic indicators like unemployment and inflation remain resilient.

Update, April 29, 2020: This article was updated to include the trade information reported on Tuesday.