US GDP grows 2% despite war and oil woes – Key factors behind growth
The US economy expanded at an annual rate of 2% in the first quarter of 2026, driven by business investment and consumer spending. Despite rising inflation and global uncertainty, the economy showed resilience with jobless claims dropping to their lowest level since the late 1960s.
The US economy grew at an annual rate of 2% in the first quarter of 2026, according to the Bureau of Economic Analysis. Business investment led the growth, with a 10.4% rise in equipment investment, driven by spending on artificial intelligence, software, and data centre infrastructure. Consumer spending increased at a 1.6% annual rate, mainly driven by services such as healthcare and financial services. Government expenditure rebounded by 4.4% after a federal shutdown in the previous quarter. However, trade acted as a drag, with net exports reducing growth by 1.3 percentage points due to a sharp rise in imports. Inflation increased significantly, with the personal consumption expenditures price index rising by 4.5%. Despite rising inflation and global uncertainty, the economy showed signs of resilience, with jobless claims dropping to their lowest level since the late 1960s.
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