What to Expect from Wednesday’s Report on Economic Growth

Key Takeaways

• The U.S. GDP will have grown at a rate annual of only 0.3% in the 1st quarter, a sharp decline from 2.4% 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 say the sharp slowdown will likely reflect the impact on the surge in imports. People rushed to buy items from overseas before President Donald Trump’s tariffs went into effect, and imports reduce the GDP.

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, which calculates GDP using economic data published at the time, showed that the GDP shrank by 2.5% per year in the first three months.

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. Businesses and individuals are becoming more pessimistic due to the tariffs. However, key economic indicators such as unemployment and inflation have remained resilient.