US economic activity contracted in the first quarter, according to the government’s preliminary estimate of GDP for the January-through-March period. A key factor in the 0.3% decline was a surge of imports, which subtract from growth for calculating GDP. Imports reduced the headline pace of growth by nearly 5 percentage points, the biggest negative impact on record for this category (since 1947). “Maybe some of this negativity is due to a rush to bring in imports before the tariffs go up, but there is simply no way for policy advisors to sugar-coat this. Growth has simply vanished,” said Chris Rupkey, chief economist at Fwdbonds.

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Consumer spending accelerated in March, driven by tariff fears that stoked purchases ahead of expectations for higher costs. Personal consumption expenditures rose 0.7% last month, led by a huge spike in auto purchases. “This was a good report, no question about it,” said Robert Frick, chief economist with Navy Federal Credit Union. “But let’s not fool ourselves,” Frick cautioned. “Things will get worse later this year, probably later in the summer.”

Hiring at US companies slowed in April, according to the ADP Employment Report. Private sector payrolls rose by just 62,000 for the month, the smallest gain since July 2024. “Unease is the word of the day. Employers are trying to reconcile policy and consumer uncertainty with a run of mostly positive economic data,” said ADP’s chief economist, Nela Richardson. “It can be difficult to make hiring decisions in such an environment.”

US pending home sale spiked in March, according to a report from the National Association of Realtors. “While contract signings are not a guarantee of eventual closings, the solid rise in pending home sales implies a sizable build-up of potential home buyers, fueled by ongoing job growth,” said NAR Chief Economist Lawrence Yun.

Inflation eased in March, according to the price indexes for personal consumption expenditures, which are regarded as the Federal Reserve’s preferred gauges for pricing trends. Prices rose 2.3% over the past 12 months for the headline measure, the lowest annual inflation rate since October. Core PCE also eased last month, slipped to a 2.6% pace.

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