The US economy is still doing well, with the Gross Domestic Product growing at 2% in the first quarter of 2026.
Here’s the news from the AP:
U.S. economy accelerated at the start of 2026, expanding at a modest 2% pace from January through March after recovering from last fall’s 43-day federal government shutdown.
The Commerce Department reported Thursday that gross domestic product — the nation’s output of goods and services — rebounded from a lackluster 0.5% expansion the last three months of 2025. The federal government’s spending and investment grew at a 9.3% annual rate in the first quarter, adding more than half a percentage point to growth after lopping off 1.16 percentage points in fourth-quarter 2025.
Growth in consumer spending, which accounts for 70% of U.S. economic activity, slowed to 1.6% in the first quarter from 1.9% at the end of 2025. Spending on goods, including food and clothing fell slightly. Spending on services slowed.
But business investment, likely driven by spending in artificial intelligence, rose at an 8.7% pace. A weak housing market continues to weigh on the economy. Residential investment fell at an 8% annual pace — the fifth straight quarterly drop and the biggest since the end of 2022. Excluding housing, nonresidential investment surged 10.4%, biggest jump in nearly three years.
It’s totally not shocking that consumer spending was higher during the Christmas season of last year than it is now. That’s typically how it works.
Overall, the economy is running along pretty nicely. However the war in Iran may have a bigger impact in the second quarter. I know gas prices are skyrocketing again given that there is no end in sight yet for the war, and that should continue to push consumer prices up and slow consumer spending even more.