Consumer spending, exports, and private investments supported economic growth in the first three months of 2026.
The U.S. economy registered a solid rebound in the first quarter after a disappointing end to 2025, new government data released on April 30 show.
First-quarter gross domestic product (GDP) growth was 2 percent, up from the 0.5 percent reading in the fourth quarter, according to the Bureau of Economic Analysis.
Prior to the release, the Atlanta Federal Reserve’s GDPNow Model indicated growth would be around 1 percent.
The consensus forecast suggested a 2.3 percent expansion.
Consumer spending, net exports, and private investments contributed to the January–March growth rate.
Consumers continued to open their wallets, with spending up 1.6 percent. The public has contended with a series of headwinds, from higher gasoline prices to the severe winter storm, but this may have been offset by the 11 percent increase in tax refunds.
Exports rose by almost 13 percent, driven almost entirely by shipments of goods.
Government consumption jumped more than 4 percent after declining nearly 6 percent in the October–December span due to the record-breaking spending impasse that shut down the federal government.
Gross private domestic investment advanced close to 9 percent, with the artificial intelligence (AI) buildout continuing to support economic growth.
On the inflation front, the GDP Price Index—a measure of prices for goods and services manufactured in the United States—rose 4.5 percent, higher than expected.
The first-quarter GDP figures come after the bureau also reported that inflation in the Federal Reserve’s preferred Personal Consumption Expenditures (PCE) price index rose to 3.5 percent in March, in line with market estimates, from 2.8 percent in February.
Core PCE inflation, which omits volatile energy and food prices, ticked up to 3.2 percent from 3 percent in the previous month.
Headline inflation measures have picked up recently due to the war in Iran, driving up global energy prices.
By Andrew Moran
