KEY POINTS
  • Gross domestic product in the U.S. declined at a 1.4% pace in the first quarter, below analyst expectations of a 1% gain.
  • Declines in fixed investment, defense spending and the record trade imbalance weighed on growth.
  • Consumer expenditures rose 2.7%, but that came amid a 7.8% increase in prices.
  • "This is noise; not signal. The economy is not falling into recession," wrote Ian Shepherdson, chief economist at Pantheon Macroeconomics.

Gross domestic product unexpectedly declined at a 1.4% annualized pace in the first quarter, marking an abrupt reversal for an economy coming off its best performance since 1984, the Commerce Department reported Thursday.

The negative growth rate missed even the subdued Dow Jones estimate of a 1% gain for the quarter, but the initial estimate for Q1 was the worst since the pandemic-induced recession in 2020. GDP measures the output of goods and services in the U.S. for the three-month period.