The increase in GDP was driven by gains in investment, exports, consumer spending and government expenditure. However, imports also rose during the period, which subtracts from GDP calculations.
Compared with the previous quarter, the stronger growth reflected upturns in government spending and exports, along with faster investment growth. These gains were partly offset by a slowdown in consumer spending, while imports turned upward.
US GDP grew 2 per cent in Q1 2026, accelerating from 0.5 per cent in Q4 2025, driven by investment, exports and government spending.
Consumer spending slowed, while imports rose.
Inflation pressures increased, with personal consumption expenditures (PCE) inflation at 4.5 per cent.
Goods exports were boosted by higher shipments of industrial supplies and materials.
Real final sales to private domestic purchasers, a key measure combining consumer spending and gross private fixed investment, rose 2.5 per cent in the first quarter, up from 1.8 per cent in the previous quarter.
Inflation indicators showed mixed trends. The price index for gross domestic purchases increased 3.6 per cent, slightly lower than 3.7 per cent in the previous quarter. However, the personal consumption expenditures (PCE) price index rose to 4.5 per cent from 2.9 per cent, while the core PCE index, excluding food and energy, climbed to 4.3 per cent from 2.7 per cent.
In terms of components, both exports and imports were lifted mainly by higher goods trade. Goods exports were supported by increased shipments of industrial supplies and materials.
Government spending rose primarily due to higher federal non-defense expenditure, especially employee compensation, which rebounded after declining in the fourth quarter of 2025. Spending patterns were also influenced by the government shutdown during the previous quarter.
Fibre2Fashion News Desk (CG)
