US economic growth accelerated at the start of the year, fueled by solid business and consumer demand.
Inflation-adjusted gross domestic product increased an annualized 2% in the first quarter after the longest-ever federal government shutdown limited growth in the closing months of 2025, according to an initial estimate issued Thursday by the Bureau of Economic Analysis.
Consumer spending, which comprises about two-thirds of economic activity, increased at a better-than-expected 1.6% rate, driven by demand for services. Business outlays on equipment and structures advanced 10.4%, the fastest pace in almost three years and supported by rapid investment in artificial intelligence technology.
The report points to an economy that has so far held firm even as the Middle East conflict pushes oil prices sharply higher and disrupts global supply chains. But the geopolitical situation risks diminishing the growth outlook should inflation-weary consumers become more guarded. - Bloomberg
