US economy grows 2.1% in Q1 on revised GDP estimate

The US economy expanded at an annualised rate of 2.1 per cent in the first quarter (Q1) of 2026, according to the third estimate released by the US Bureau of Economic Analysis (BEA). The revised figure is 0.5 percentage point higher than the second estimate of 1.6 per cent and marks an improvement from the 0.5 per cent growth recorded in the fourth quarter of 2025.The upward revision primarily reflected a downward revision to imports, which are subtracted in GDP calculations, partly offset by weaker consumer spending. Growth in the first quarter was driven by investment, exports, government spending and consumer spending, although imports also increased, BEA said in a press release.

The US economy grew at an annualised 2.1 per cent in Q1 2026, according to the third BEA estimate, revised up from 1.6 per cent.
Growth was driven by investment, exports, government and consumer spending, while information and manufacturing led industry gains.
Real GDP rose in 46 states, inflation remained elevated, and current-dollar personal income increased 3.4 per cent annually.

From an industry perspective, real GDP growth reflected a 7.5 per cent increase in government value added, a 4.5 per cent rise in private goods-producing industries and a 0.8 per cent increase in private services-producing industries.

Information, the federal government, professional, scientific and technical services, and durable goods manufacturing were the largest contributors to growth, while retail trade, wholesale trade, and finance and insurance weighed on overall performance.

Real final sales to private domestic purchasers, a measure combining consumer spending and gross private fixed investment, increased 1.7 per cent, revised down from the previous estimate. Real gross output rose 1.7 per cent, supported by gains in government and private services-producing industries.

Real gross domestic income (GDI) increased 1.2 per cent in the first quarter, revised up 0.3 percentage point from the previous estimate. The average of real GDP and real GDI rose 1.7 per cent.

Inflation remained elevated. The price index for gross domestic purchases increased 3.6 per cent, while the personal consumption expenditures (PCE) price index rose 4.6 per cent. Core PCE, which excludes food and energy, increased 4.4 per cent.

At the state level, real GDP increased in 46 states and the District of Columbia during the quarter. Washington recorded the fastest annualised growth at 4.5 per cent, led by the information sector, while South Dakota recorded the steepest decline at 1.6 per cent. Delaware’s GDP was unchanged.

Current-dollar personal income increased by $222.6 billion, or 3.4 per cent at an annual rate, with gains recorded in 49 states and the District of Columbia. North Dakota posted the strongest increase at 22.4 per cent, while Hawaii recorded the largest decline at 23.9 per cent. Earnings increased in 46 states, while personal current transfer receipts rose in 45 states and the District of Columbia.

Fibre2Fashion News Desk (SG)