The U.S. economy experienced a sharper contraction in Q1 than initially reported, with GDP revised downward to a -0.5% annualized rate from -0.2%.
This revision reflects a significant slowdown in consumer spending, which grew at just 0.5% in the quarter — its weakest pace since the Covid-19 pandemic.
However, it wasn’t just the pullback in consumer spending.
The services sector contributed only 0.3 percentage points to GDP, its lowest since Q2 2020, and all seven major categories of services saw downward revisions. Recreational services posted the largest negative impact, followed by travel and transportation.
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