Government data to be released on Wednesday is expected to show a sharp economic slowdown over the initial months of President Donald Trump’s second term as a flurry of tariff proposals stoked uncertainty among businesses and consumers, analysts told ABC News.
The measure of gross domestic product, or GDP, will likely be lowered by a surge of imports as firms stockpiled inventory to avoid far-reaching tariffs, though the trend did not reflect economic weakness, analysts said.
The government’s GDP formula subtracts imports from exports in an effort to exclude foreign production from the calculation of total goods and services.
The report will detail GDP over the first three months of 2025, offering the first look at a top gauge of economic health since Trump took office.
The data covers a period before the so-called Liberation Day tariffs went into effect in early April.
Analysts widely expect a steep decline in economic performance at the outset of this year, though they disagree over the severity of the slowdown.
Some analysts believe the data will show the U.S. economy tipped into a contraction over the most recent quarter, which would likely intensify warnings on Wall Street about a possible recession.
Bank of America Global Research and BNP Paribas both expect the economy to have grown at an annualized rate of 0.4% over a three-month stretch at the start of 2025, which would mark a sharp decline from a rate of 2.4% at the end of last year.
S&P Global Ratings expects the data to show the economy contracted at an annualized rate of 0.3% at the outset of this year. A forecast from the Federal Reserve Bank of Atlanta, which excludes gold imports, shows the economy shrank at a 1.5% annualized rate.
“We anticipate a marked slowdown in the U.S. economy during the first quarter, driven by increasing policy uncertainty surrounding trade, tariffs, and immigration,” S&P Global Ratings said in a note to clients.
The data may be skewed by a flood of imports as companies sought to circumvent tariffs, S&P Global Ratings said. The GDP measure deducts imports to exclude foreign-made goods and services, so a one-time import surge could blur the finding.
“The first-quarter GDP reading may not provide an accurate reflection of underlying economic conditions because it’s significantly influenced by the frontloading of imports,” S&P Global Ratings said.
President Donald Trump looks on, on the day he welcomes the Super Bowl LIX winner, NFL champion Philadelphia Eagles on the South Lawn of the White House in Washington, D.C., April 28, 2025.
Leah Millis/Reuters
Many observers define a recession through the shorthand metric of two consecutive quarters of decline in a nation’s inflation-adjusted GDP. The National Bureau of Economic Research, a research organization tasked with formally identifying a recession, uses a more complicated definition that draws on a range of indicators.
Despite flagging consumer sentiment and ongoing market turmoil, some key measures of the economy remain fairly strong.
The unemployment rate stands at a historically low level and job growth remains robust, though it has slowed from previous highs. Meanwhile, inflation cooled in March, putting price increases well below a peak attained in 2022, data showed.
The sturdy data offers at best partial reassurance, some economists previously told ABC News.
Measures of the economy like inflation and hiring are released one month after the data is gathered, and they often reflect slow-moving shifts in business or consumer behavior, the economists said. As a result, such measures can prove outdated, especially when the economy is in flux.
Speaking at the Economic Club of Chicago earlier this month, Fed Chair Jerome Powell acknowledged the “solid condition” of the U.S. economy, but he cautioned about signals of a potential slowdown.
“Life moves pretty fast,” Powell said.
