CHICAGO, June 27, 2025 — Sales within the lodging and food-away-from-home industries fell by $4.8 billion during the first quarter as consumers shifted dollars to stockpiling imported goods, according to revised data from the U.S. Department of Commerce.
The pre-emptive spending decreased the hospitality sector’s contribution to the United States’ Gross Domestic Product (GDP) by .11 percentage points, a significant drop given the volumes involved.
Commerce recalculated the overall decline in the GDP to be 0.5%, a marked downgrade from the 0.2% decline it had initially announced.
It attributed the decrease in domestic commerce to a spike during the quarter in the purchase of imports, particularly foreign-made automobiles. The price of items from other countries was expected during Q1 to rise substantially in subsequent months because of Trump Administration’s plan to levy tariffs on most goods shipped into the U.S.
A 10% duty was indeed levied on the imports from most countries on April 5. The White House said additional duties will be imposed in early July on products from nations that have put protective tariffs on U.S. imports.
However, President Trump could pause adoption of those “reciprocal” tariffs a second time, White House spokesperson Karoline Levitt told reporters Thursday. The higher duties were postponed by the president for 90 days in April.
The restated GDP data from Commerce’s Department of Economic Analysis underscores how Trump’s tariffs are affecting the top lines of restaurants and other FAFH operations. Much of the industry’s apprehension has centered on the bottom-line impact, since the costs of most imported goods are expected to jump.
A second quarterly contraction of GDP would signal the U.S. economy is officially in a recession.
As Managing Editor for IFMA The Food Away from Home Association, Romeo is responsible for generating the group's news and feature content. He brings more than 40 years of experience in covering restaurants to the position.