The Atlanta Fed’s GDPNow model on Friday lowered its forecast for the U.S. economy to a contraction at a 1.5% annual rate. This would be the first quarterly contraction in the economy since the first quarter of 2022.

The US economy is setting up to take a major step back in the first quarter after a pair of reports showed weaker consumer spending and a dramatic widening of the trade deficit at the start of the year,

The central bank's GDPNow tracker of incoming metrics is indicating that gross domestic product is on pace to shrink by 1.5%.