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The latest MassBenchmarks bulletin from the UMass Amherst Donahue Institute shows that Massachusetts real gross state product (GDP) decreased in the first quarter of 2025 at an annual rate of 1.1%, while U.S. GDP decreased at an annual rate of 0.3%.

The report, released May 12 and based on data from the U.S. Bureau of Economic Analysis, found the contraction was primarily due to a surge in imports and a weakening of consumer spending. Businesses stocked up on pre-tariff goods while consumers acted with caution, reflecting a fall in confidence in future conditions. Whether or not consumer spending will further weaken remains unclear, according to the report’s analysts.

The report explains that, since February, economic volatility and uncertainty have been fueled by a series of tariff announcements, threats and postponements. This has had a demonstrable and negative impact on both state and national consumer and business confidence and helps explain weakening consumer spending in the first three months of 2025.

The MassBenchmarks project is an initiative of the University of Massachusetts Amherst Donahue Institute in cooperation with the Federal Reserve Bank of Boston. A comprehensive analysis of the state of the Massachusetts economy can be found in the most recent issue of the MassBenchmarks journal, published in March.