US Economy Grew at 2% Rate in First Quarter

The US economy accelerated at the start of 2026, expanding at a modest 2% pace from January through March after recovering from last fall's 43-day federal government shutdown, per the AP. The Commerce Department reported Thursday that gross domestic product—the nation's output of goods and services—rebounded from a lackluster 0.5% expansion the last three months of 2025. Economists surveyed by the Wall Street Journal expected a rise of 2.2%.

• Growth in consumer spending, which accounts for 70% of US economic activity, slowed to 1.6% in the first quarter from 1.9% at the end of 2025. But business investment, likely driven by investments in artificial intelligence, rose at an 8.7% pace.
• The New York Times sees the report as showing a "streak of resilience" for the economy given that the tail end of the period covered includes the start of the Iran war.
• Going forward, however, the outlook is more clouded. Carl Weinberg, chief economist at High Frequency Economics, did not even bother to forecast first-quarter GDP growth. "The truth is that we do not have any defensible basis for trying to project how these indicators will print," he wrote in a commentary. President "Trump's war with Iran has led to a total blockade of the Strait of Hormuz. We do not know how to model the impact of that event, as we have never seen anything quite like it."