US economy grew at 2.1% in first quarter

Key Points:

• The U.S. economy grew at an annualized rate of 2.1% in the first quarter of 2026, surpassing economists' expectations of 1.6% growth, according to the Commerce Department's final GDP reading.
• Key contributors to GDP growth included investment, exports, government spending, and consumer spending, with significant gains in the information technology sector, federal government, professional services, and durable goods manufacturing.
• Investment in information processing equipment, computers, software, and research and development surged, driven by artificial intelligence-related capital spending.
• Despite overall growth, consumer spending showed signs of strain, supported by savings drawdown, increased credit use, and household wealth, while sectors sensitive to interest rates, such as housing, remained weak.
• Economists predict slower growth and persistent inflation, with forecasts of around 1.9% real GDP growth in 2026 and 2027, amid ongoing elevated oil prices and constrained consumer demand.