US economy grows 2% in Q1, missing economist expectations of 2.3%
Fox Business • • business
Key Points:
- The U.S. economy grew at an annualized rate of 2% in the first quarter of 2026, rebounding from a sluggish 0.5% growth in the fourth quarter of 2025, though slightly below the 2.3% forecast by economists.
- Key drivers of GDP growth included increased investment in equipment and intellectual property, exports, consumer spending—particularly in healthcare services—and government spending, while investment in residential and nonresidential structures declined.
- Federal government spending rose due to increased federal employee compensation following the end of the government shutdown in the previous quarter.
- Experts noted that the AI-driven investment and tax cuts are supporting economic growth, but rising energy prices and inflationary pressures, partly fueled by increased capital expenditure and energy demand, may dampen momentum in the coming months.
- Real final sales to private domestic purchasers grew by 2.5% in Q1, indicating stronger consumer spending and private investment compared to the previous quarter.
