The U.S. economy expanded at a solid and unexpected 2.1% annual pace from January through March, according to a report by the Associated Press.
The data is presented in the Commerce Department’s final estimate of first-quarter growth, which was released on Thursday.
The growth in gross domestic product — the nation’s output of goods and services — marked a rebound from a sluggish 0.5% in the last three months of 2025 when a 43-day federal government shutdown weighed on the economy.
Thursday’s numbers were an upgrade from Commerce’s previous first-quarter estimate of 1.6% growth.
Business investment surged, probably reflecting an investment boom in artificial intelligence.
But consumer spending, which accounts for around 70% of U.S. economic activity, fell sharply from fourth-quarter 2025 and from Commerce’s previous estimate in a sign that consumers may be cutting back in the face of higher gasoline prices caused by the war with Iran.
“It was unsettling to see consumer spending revised even lower,” Heather Long, chief economist at Navy Federal Credit Union, said in a commentary. “Spending is likely to tick up in (the second quarter), but it’s worth watching carefully…
“It’s been a tough few months for American consumers, but most have been able to make it through,” Long said. “The question is, ‘How much relief is coming?’ as the U.S. and Iran continue talks toward a resolution of the conflict.”
