US growth picks up in the first quarter
The US economy grew at a 2.0% annualized rate in the first quarter, driven by a rebound in government spending. However, growth in consumer spending slowed, and economists expect the war in the Middle East to weigh on economic growth from the second quarter.
The US economy grew at a 2.0% annualized rate in the first quarter, according to the Commerce Department's Bureau of Economic Analysis. The growth was driven by a rebound in government spending after a crippling government shutdown. In the previous quarter, economic growth slowed to a 0.5% pace due to a contraction in federal government outlays. Business spending on equipment continued to be supported by an artificial intelligence spending boom and the building of data centers. However, growth in consumer spending slowed further, losing momentum even before the US-Iran conflict raised gasoline prices above $4 a gallon. The labor market has slowed significantly, with employment growth averaging 68,000 jobs per month in the first quarter. Economists expect the war in the Middle East to weigh on economic growth from the second quarter.
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