The U.S. economy shrank at a faster pace in the beginning of the year than originally reported, as new economic data showed a more significant drop in consumer spending.

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.

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