Real GDP grew at an annualized rate of 2.1% in the first quarter of 2026 according to the Bureau of Economic Analysis’ third and final release on Q1 GDP, improving on the second estimate and expectations of 1.6%. Growth was driven by strong business investment (10.6% quarter-on-quarter seasonally adjusted annual rate up from 10.1%) and federal government spending (9.4% down from 9.5%). Personal consumption was positive but weak and revised down significantly from the second estimate (0.5% down from 1.4%). Growth was held back by weaker residential investment (-7.8% down from -6.2%) and a small drag from net exports. The upward revision was primarily driven by a significant downward revision to imports (11.8% down from 21.1%).
The ABA Office of the Chief Economist believes the third and final estimate of Q1 GDP underscores an economy that is resilient but with growth increasingly reliant on non-residential investment rather than housing or consumer spending. This suggests that loan demand from consumers may moderate while business demand remains strong.
