The U.S. economy shrank at a 0.5% annual pace from January through March as President Donald Trump’s trade wars disrupted business, the Commerce Department reported Thursday in an unexpected deterioration of earlier estimates.

First-quarter growth was weighed down by a surge of imports as U.S. companies, and households, rushed to buy foreign goods before Trump could impose tariffs on them. The Commerce Department previously estimated that the economy fell 0.2% in the first quarter. Economists had forecast no change in the department’s third and final estimate.

The January-March drop in gross domestic product — the nation’s output of goods and services — reversed a 2.4% increase in the last three months of 2024 and marked the first time in three years that the economy contracted. Imports expanded 37.9%, fastest since 2020, and pushed GDP down by nearly 4.7 percentage points.

Consumer spending also slowed sharply, expanding just 0.5%, down from a robust 4% in the fourth-quarter of last year. It is a significant downgrade from the Commerce Department’s previous estimate.

A category within the GDP data that measures the economy’s underlying strength rose at a 1.9% annual rate from January through March. It’s a decent number, but down from a 2.9% pace in the fourth quarter of 2024 and from the Commerce Department’s previous estimate of 2.5% January-March growth.

This category includes consumer spending and private investment but excludes volatile items like exports, inventories and government spending.

And federal government spending fell at a 4.6% annual pace, the biggest drop since 2022.

The first-quarter import influx likely won’t be repeated in the April-June quarter and therefore shouldn’t weigh on GDP. In fact, economists expect second-quarter growth to bounce back to 3% in the second quarter, according to a survey of forecasters by the data firm FactSet.

The first look at April-June GDP growth is due July 30.

— Associated Press

Conagra is latest to remove artificial colors

Conagra Brands, the parent company of Duncan Hines, Slim Jim and other brands, is the latest big food company to say it’s discontinuing the use of artificial dyes.

In a statement released Wednesday — the same day as a similar statement from Nestle — Chicago-based Conagra said it will remove artificial colors from its frozen foods by the end of this year. Conagra’s frozen brands include Marie Callender’s, Healthy Choice and Birds Eye.

Conagra said it won’t offer products containing artificial colors to K-12 schools by the beginning of the 2026-2027 school year, and it will work to discontinue artificial dyes across its entire portfolio by the end of 2027.

Kraft Heinz and General Mills made similar pledges earlier this month.

Feds OK candy-snack maker merger

The U.S. Federal Trade Commission announced late Wednesday that after nearly a year of investigation, it determined that a merger between Mars and snack maker Kellanova wouldn’t threaten competition in the market.

McLean, Va.-based Mars makes sweet snacks like M&M’s, Snickers and Skittles as well as Ben’s Original rice and pet food. Chicago-based Kellanova, which was created in 2023 when the Kellogg Co. split into two companies, owns brands including Cheez-its, Pringles, Eggo, Town House, MorningStar Farms and Rice Krispies Treats.

Last August, Mars announced its intention to buy Kellanova for $35.9 billion. It said the deal would help it broaden its snacking portfolio and expand globally. Around 50% of Kellanova’s net sales come from outside the U.S. and Canada.

GE to onshore washer production to Kentucky

GE Appliances announced a nearly half-billion-dollar project Thursday that it says will create 800 new jobs and shift production of clothes washers from China to its massive manufacturing complex in Kentucky.

The $490 million investment positions the Kentucky home appliances company to rank as the biggest U.S. manufacturer of washing machines, it said.

“We are bringing laundry production to our global headquarters in Louisville because manufacturing in the U.S. is fundamental to our ‘zero-distance’ business strategy to make appliances as close as possible to our customers and consumers,” CEO Kevin Nolan said. “This decision is our most recent product reshoring and aligns with the current economic and policy environment.”

The announcement comes as President Donald Trump attempts to lure factories back to the United States by imposing import taxes — tariffs — on foreign goods. He has slapped 10% tariffs on imports from most countries and put 30% levies on Chinese goods. GE Appliances says nearly all the steel used in its U.S. manufacturing for its appliances comes from American steelmakers.

Shell denies reports of BP takeover in works

British oil giant Shell on Thursday denied media reports that it is in talks to buy rival BP.

The Wall Street Journal on Wednesday said Shell was holding “early stage talks,? to acquire BP, citing people familiar with the matter.

“In response to recent media speculation Shell wishes to clarify that it has not been actively considering making an offer for BP and confirms it has not made an approach to, and no talks have taken place with, BP with regards to a possible offer,” Shell said in a statement to the London Stock Exchange.

Shell has repeatedly denied speculation that it was considering a takeover of its smaller rival BP, saying it was focused on streamlining and simplifying its own business.

Fewer in U.S. seek jobless benefits

The number of Americans applying for unemployment benefits fell last week, the Labor Department said Thursday, a sign that companies aren’t cutting many jobs.

Jobless claims for the week ended June 21 dropped 10,000 to 236,000, a historically-low level. The four-week average of claims, which smooths out weekly volatility, dipped 750 to 245,000.

Applications for unemployment aid are a proxy for layoffs, and so the decline is evidence that businesses are mostly holding onto their employees. Yet separate data suggests hiring also remains cool.

The unemployment rate remains low, though there are signs that the economy is slowing. So far this year, employers have added a solid but unspectacular 124,000 jobs a month, down from an average 168,000 last year.

— From news services