The growth in the January-March quarter was supported by exports, investment, consumer spending and government expenditure, while imports also increased. Since imports are deducted in GDP calculations, the rise partly weighed on overall growth, BEA said in a press release.
The US economy grew at an annualised rate of 1.6 per cent in Q1 2026, revised down from the initial 2 per cent estimate due to weaker investment and consumer spending, according to the BEA.
Growth was supported by exports, government spending and investment.
Inflation remained elevated, with the PCE price index rising 4.5 per cent, while corporate profit growth slowed sharply during the quarter.
Compared to the previous quarter, the acceleration in GDP growth was driven by stronger government spending, a rebound in exports and faster investment activity. Consumer spending growth, however, slowed during the quarter.
Real final sales to private domestic purchasers, which combines consumer spending and gross private fixed investment, increased 2.4 per cent in the first quarter, slightly revised down from the earlier estimate of 2.5 per cent.
Inflationary pressures remained elevated during the quarter. The gross domestic purchases price index rose 3.5 per cent, marginally lower than the previous estimate. The personal consumption expenditures (PCE) price index increased 4.5 per cent, unchanged from the advance estimate, while the core PCE price index excluding food and energy rose 4.4 per cent, revised slightly upward.
The real gross domestic income (GDI) increased 0.9 per cent in the first quarter, slowing from 1.6 per cent growth in the previous quarter. The average of real GDP and real GDI, a broader measure of economic activity, rose 1.3 per cent compared to 1.1 per cent in Q4 2025.
Meanwhile, profits from current production increased by $40.4 billion in Q1, significantly lower than the $246.9 billion increase recorded in the preceding quarter.
Fibre2Fashion News Desk (SG)
