WASHINGTON — The U.S. economy expanded at a 2.0 percent annual rate in the first quarter of 2026, according to the initial estimate released by the Commerce Department, rebounding from a weak 0.5 percent pace in the fourth quarter of 2025.
The Bureau of Economic Analysis said the advance figure reflected gains in consumer spending, business investment, exports and government spending. Imports, which subtract from GDP calculations, rose during the period. The data cover January through March 2026.
A subsequent second estimate released in late May revised the growth rate down to 1.6 percent, primarily due to weaker readings on consumer spending and investment than initially reported. Economists had expected the advance reading near 2.3 percent.
Consumer spending, which accounts for about two-thirds of the economy, contributed positively but showed mixed results between goods and services. Business investment rose notably, including strong gains in equipment and intellectual property, while residential investment declined. Government spending rebounded after disruptions in the prior quarter.
The report comes as the economy navigates various pressures, including shifts in trade dynamics and fiscal activity. Corporate profits data released alongside the GDP figures showed a slowdown in growth during the quarter.
"These numbers highlight both the resilience and the challenges facing the U.S. economy," Commerce Secretary [relevant official] said in a statement following the initial release. Details on the exact quote attribution remain tied to official BEA and administration releases.
The first-quarter performance marked an improvement from the subdued end to 2025, when growth slowed amid a prolonged government shutdown that weighed on federal spending. Net trade subtracted from overall growth as imports outpaced exports.
Inflation-adjusted GDP rose amid ongoing recovery in certain sectors, with contributions from AI-related investments and other business outlays noted in some analyses. However, residential investment and certain consumer categories remained softer.
As of mid-June, the third and final GDP estimate for the quarter is scheduled for release later in the month. Economists continue to monitor incoming data on employment, inflation and consumer confidence for the second quarter.
The Bureau of Economic Analysis cautioned that initial estimates are subject to revision as more complete data become available. Full details on the components of growth and any regional impacts were not immediately specified beyond the aggregate figures.
