U.S. GDP rises 1.6 percent in Q1 2026, Gregory Daco notes

U.S. GDP rises 1.6 percent in Q1 2026, Gregory Daco notes
U.S. GDP growth slips in Q1 2026

Gregory Daco reports that U.S. real GDP growth for the first quarter of 2026 has been revised 0.4 percentage points lower. Quarter-on-quarter, growth reached 1.6 percent, while year-on-year growth was 2.6 percent.

Consumer spending increased by 1.4 percent, and business investment surged by 10.1 percent due to strong AI-led gains. Residential investment fell by 6.3 percent, while trade detracted 1.3 points as imports surged. Inventories contributed 0.1 point and government spending increased by 4.4 percent following a government shutdown. Personal consumption expenditures inflation was reported at 3.1 percent, with core inflation also at 3.1 percent year-on-year.

Gregory Daco has previously highlighted that U.S. inflation is outpacing real wage growth, with consumers drawing more on savings and credit than in the prior year. He also noted that longer-maturity U.S. Treasury yields reached near-decade highs as global bond investors face challenging conditions. These factors have shaped the backdrop for recent U.S. economic data.

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