Overview
- Official BEA data show real GDP rose at a 2.0% annual rate in the first quarter after the prior quarter was revised down to 0.5%.
- Federal spending rebounded after last year’s 43‑day shutdown, growing at a 9.3% pace and adding more than half a percentage point to growth.
- Nonresidential investment jumped, with analysts tying much of the strength to AI‑related equipment and software purchases that rely on imported parts, which limits how much production shows up in U.S. GDP.
- Consumers pulled back, as inflation‑adjusted spending slowed to 1.6% and housing investment fell 8% for a fifth straight quarterly drop.
- The Iran conflict has disrupted shipments through the Strait of Hormuz and pushed up fuel costs, and the IEA says inventory sales are masking large output losses that could weigh on activity if disruptions persist.