Overview
- The Bureau of Economic Analysis in its third estimate on Thursday raised first-quarter GDP to a 2.1% annualized rate, up from the 1.6% second estimate.
- Business investment led the upgrade with equipment spending and intellectual property tied to AI showing large gains while imports were revised lower, boosting the headline number.
- Consumer spending, which makes up more than two-thirds of GDP, was sharply downgraded to a 0.5% annualized pace after cuts to services and travel outlays.
- Profits and inventory data were materially revised, with profits from current production lifted to a $74.4 billion rate and final sales to private domestic purchasers trimmed to a 1.7% pace, leaving the durability of the reported growth unclear.
- Data collection problems from the late-2025 federal shutdown and volatile components mean the composition of growth and its implications for markets and Federal Reserve decisions will need further confirmation from upcoming reports.