Overview
- The Commerce Department’s advance report Thursday put annualized GDP growth at 2.0%, up from 0.5% in late 2025 but below roughly 2.3% expected by forecasters.
- Business investment in equipment jumped 10.4%, led by spending on data centers and information‑processing hardware tied to artificial intelligence.
- Personal consumption, which accounts for about 70% of the economy, slowed to 1.6% as higher gasoline prices and broader inflation squeezed household budgets.
- Residential investment fell 8.0% for a fifth straight quarterly drop, reflecting the drag from elevated mortgage rates on homebuilding and sales.
- Economists warn that inflation and weaker household demand could cool growth in coming quarters, even as Fed Chair Jerome Powell says the economy remains resilient.