Washington (DC, USA), 30 April (LaPresse/AP) – The US economy picked up pace at the start of 2026, with GDP growing at a modest rate of 2% from January to March after recovering from last autumn’s 43-day federal government shutdown. However, the outlook is clouded by the war in Iran. The Department of Commerce reported on Thursday that gross domestic product — the nation’s output of goods and services — rebounded after sluggish growth of 0.5% in the final three months of 2025. Federal government spending and investment grew at an annual rate of 9.3% in the first quarter, adding more than half a percentage point to growth after subtracting 1.16 percentage points in the fourth quarter of 2025. Growth in consumer spending, which accounts for 70% of US economic activity, slowed to 1.6% in the first quarter from 1.9% at the end of 2025. But business investment, likely driven by investment in artificial intelligence, rose at a rate of 8.7%. Iran has blocked the Strait of Hormuz, through which a fifth of the world’s oil and liquefied natural gas passes. This has driven up energy prices, fuelling inflation and hurting consumers. The Federal Reserve, announcing on Wednesday that it would keep its benchmark interest rate unchanged, cited “a high level of uncertainty” stemming from the conflict.
US GDP grows by 2% in the first quarter of 2026
Washington (DC, USA), 30 April (LaPresse/AP) – The US economy picked up pace at the start of 2026, with GDP growing at a modest rate of 2% from January to March after recovering from last autumn’s 43-day federal government shutdown. However, the outlook is clouded by the war in Iran. The Department of Commerce reported on Thursday that gross domestic product — the nation’s output of goods and services — rebounded after sluggish growth of 0.5% in the final three months of 2025. Federal government spending and investment grew at an annual rate of 9.3% in the first quarter, adding more than half a percentage point to growth after subtracting 1.16 percentage points in the fourth quarter of 2025. Growth in consumer spending, which accounts for 70% of US economic activity, slowed to 1.6% in the first quarter from 1.9% at the end of 2025. But business investment, likely driven by investment in artificial intelligence, rose at a rate of 8.7%. Iran has blocked the Strait of Hormuz, through which a fifth of the world’s oil and liquefied natural gas passes. This has driven up energy prices, fuelling inflation and hurting consumers. The Federal Reserve, announcing on Wednesday that it would keep its benchmark interest rate unchanged, cited “a high level of uncertainty” stemming from the conflict.
