U.S. GDP Grew 2% in Q1 2026, Rebounding From Prior Quarter
America's economy rebounded sharply in the first quarter with 2% growth, driven by federal spending, business investment in artificial intelligence and consumer activity. The expansion exceeded the G7 average of 1.1% and dwarfed results from major European partners still grappling with energy shocks from the war in Iran. Canada posted the second-strongest performance among G7 members at 1.7%.
New York PostU.S. economy expanded at a 2% pace in the first quarter of 2026 compared with the previous quarter, rebounding from lackluster growth at the end of 2025 and outpacing every other member of the Group of Seven bloc, the US Department of Commerce reported. America’s gross domestic product rebounded at a faster rate than all other G7 members in Q1 2026.
48%. 7%, according to the US Department of Commerce.
Business investment in artificial intelligence spurred US business investments in Q1 2026. The US GDP growth in Q1 2026 was spurred by growing federal and private investments. 9% in Q4 2025.
The slowdown in consumer spending came even as the broader economy healed from last fall’s government shutdown. Canada saw an increase in manufacturing, wholesale trade, transportation, and mining and oil and gas extraction in Q1 2026, Statistics Canada said. 5%, according to the Office for National Statistics.
U.S. The EU has been especially hurt in the energy sector due to the war in Iran. The war in Iran has blocked the Strait of Hormuz.
Souring energy prices have affected the world's top economies due to the war in Iran, with inflation in the EU hitting the central bank’s 2% target and adding pressure on finance officials to consider interest rate hikes. While US tech businesses enjoy a boom from artificial intelligence investment, average consumer spending was down in the latest quarter.
Tokyo is expected to see a rougher outcome for the rest of 2026, with the following year expected to see little to no economic growth at all. S.
Key Facts
Story Timeline
4 events- 2025 Q4
US consumer spending grew 1.9% and overall GDP recorded lackluster growth ending in a government shutdown
2 sourcesUS Department of Commerce · New York Post - 2026 Q1
US GDP expanded 2%, federal spending grew 9.3%, business investment rose 8.7% spurred by AI, consumer spending slowed to 1.6%
3 sourcesBureau of Economic Statistics · US Department of Commerce · New York Post - 2026 Q1
G7 projected growth 1.1%; Canada 1.7% with gains in manufacturing, mining and oil extraction; UK 0.5%; Japan 1.48%; Germany 0.3%; Italy 0.2%; France 0%
4 sourcesNew York Post · Office for National Statistics · Statistics Canada · US Department of Commerce - 2026 Q1
War in Iran blocked Strait of Hormuz, driving up energy prices and contributing to EU inflation hitting 2% target
1 sourceNew York Post
Potential Impact
- 01
Strong US growth led by federal outlays and AI investment may widen the performance gap with slower-growing European G7 partners facing energy shocks.
- 02
Slowing US consumer spending could limit momentum in an economy where it accounts for about 70% of activity, especially amid rising energy-driven inflation.
- 03
Canada’s manufacturing, mining and oil extraction gains may be partially offset by recession risks from global energy price shocks and US tariff disputes.
- 04
Japan faces prospect of little to no growth in 2027 following its 1.48% Q1 expansion.
Transparency Panel
Related Stories
MarketWatchS&P 500 and Nasdaq Close at Record Highs
The S&P 500 rose 0.8 percent to end the week near 7400, recording both its highest daily and weekly closes in history. The Nasdaq also achieved record daily and weekly closes. A leveraged trader shorting both indexes sits on more than $1.9 million in unrealized losses after addin…
BenzingaLime Files for Nasdaq IPO Under Ticker LIME
The Uber-backed micromobility company incorporated as Neutron Holdings, Inc. filed its S-1 with the U.S. Securities and Exchange Commission on Friday. Lime reported revenue growth to $886.7 million last year while posting positive free cash flow, yet flagged substantial doubt abo…
theyeshivaworld.comIDF Strikes 85 Hezbollah Sites in Lebanon as Both Sides Report Attacks and Casualties
The Israeli military conducted air and ground strikes on more than 85 Hezbollah infrastructure targets in the past 24 hours, including weapon storage facilities and an underground production site in the Beqaa Valley. Three IDF soldiers were wounded in two separate explosive drone…