Underlying economic growth remained solid in early 2025, but tariffs and uncertainty are expected to cause a further slowdown.

The economy shrank 0.3% in the first three months of the year, a steep downturn from the pace of growth in 2024.

As recession fears reverberate from Washington to Wall Street, Wednesday brought the most comprehensive yardstick yet of the health of the U.S. economy yet as the government released the first estimate of the country’s gross domestic product over the first three months of 2025.