U.S. Preliminary GDP Data for Q1 2025 Released on May 29
U.S. Preliminary GDP Data for Q1 2025 Released on May 29
On May 29, 2025, the U.S. Bureau of Economic Analysis (BEA) unveiled the second estimate of the nation’s Gross Domestic Product (GDP) for the first quarter of 2025, offering fresh insights into the economic landscape. The report, released at 8:30 a.m. EDT, indicates that real GDP registered a quarterly annualized rate of -0.2%, a slight improvement from the advance estimate of -0.3% announced in April. This update reflects revised data, particularly in investment, which saw an upward adjustment, though tempered by a downward revision in consumer spending. The announcement, eagerly awaited by market analysts and policymakers, underscores the dynamic shifts in economic activity as the U.S. navigates global trade challenges and domestic policy changes.
The BEA highlighted that the GDP figure was shaped by a significant surge in imports, which act as a subtraction in GDP calculations, alongside a notable reduction in government spending. However, positive contributions came from consumer spending, investment, and exports, which provided some counterbalance. Personal consumption expenditures reached a growth rate of 1.2%, lower than the anticipated 1.7% and the previous estimate of 1.8%. The GDP price index held steady at 3.7%, aligning with expectations, while the core Personal Consumption Expenditures (PCE) price index came in at 3.4%, slightly below the forecasted 3.5%. These figures, released on May 29, offer a critical snapshot of economic performance amid ongoing trade policy uncertainties, particularly related to anticipated tariffs.
The timing of this release, coinciding with other economic indicators such as initial jobless claims reported at 240,000 (against a forecast of 230,000), has stirred discussions among investors. The data suggests a complex economic environment, with strong underlying demand reflected in consumer spending and inventory buildups, yet pressures from external trade dynamics. The May 29 report also notes the impact of external factors, such as the January 2025 California wildfires, though their precise effect on GDP remains unquantified. As markets digest this information, the slight upward revision in GDP has sparked cautious optimism, with S&P 500 futures showing a 1.57% rise on the day of the release, signaling positive market sentiment. The next GDP estimate, set for June 26, 2025, will provide further clarity on these trends.
