US economy contracts 0.2% in Q1 amid rising imports

The US economy contracted less than expected in the second reading of first-quarter Gross Domestic Product (GDP), with imports rising and government spending falling.

Data released today, May 29, showed real GDP shrank 0.2% annualized in the first quarter, below the initial 0.3% contraction estimate.

This second reading beat analyst forecasts of a 0.3% decline, following 2.4% growth in the previous quarter.

The Bureau of Economic Analysis attributed the contraction to higher imports and lower government spending, partly offset by increases in private investment and exports.

The revision mainly reflects higher investment estimates, partly balanced by lower consumer spending figures.

The Bureau of Economic Analysis kept the personal consumption expenditures (PCE) price index at the initial estimate of the last quarter of 3.6%.

It lowered the core PCE price index, excluding food and energy, to 3.4% from 3.5% of the previous estimate.