GDP was revised to -0.5% as consumption weakened and inflation edged higher, complicating Fed policy. See why markets are watching inflation, not growth.

The U.S. economy contracted a bit faster than previously thought in the first quarter amid tepid consumer spending, underscoring the distortions caused by the Trump administration's aggressive tariffs on imported goods.

Consumer spending and exports fell slightly in the latest estimate, leading to a downward revision. Imports, which dragged down overall output during the first three months of the year, also came in smaller.