The chaotic start to President Trump’s second term roiled the economy at the beginning of the year, as consumers and businesses scrambled to react to a constant stream of tariff announcements and policy shifts.

The policies, and the uncertainty they created, were enough to push economic growth into reverse in the first quarter. U.S. gross domestic product, adjusted for inflation, declined at an 0.3 percent annual rate in the first three months of the year, the Commerce Department said Wednesday, a stunning reversal from the strong growth at the end of last year.

The first quarter decline was largely the result of quirks in the way economic activity is measured. More reliable data on consumer spending and business investment suggested that growth slowed in the first quarter but didn’t contract.

But while the negative number was misleading, it reflected something real about the way Mr. Trump has upended the economy in first months in office. Consumers raced to buy cars and other goods before tariffs took effect. Businesses did the same with equipment, parts and raw materials, laying in stores for the trade war to come.

Moreover, the first quarter figures were a glimpse at the past, before Mr. Trump announced even more sweeping tariffs in early April. That announcement, and the series of escalations and reversals that followed, caused chaos in financial markets and set off a full-blown trade war with China.

Overall gross domestic product declined in the first quarter, but a measure of underlying growth, based on spending and investment, was solid.

Note: Data is quarterly change in real gross domestic product, seasonally adjusted at annual rates.

Source: Bureau of Economic Analysis

By The New York Times

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