US Q1 2026 GDP Grows 2%; US-Israel War With Iran Begins

The United States and Israel launched a war with Iran in the first quarter of 2026, a conflict now in its ninth week as of April 30, 2026. U.S. gross domestic product registered a 2% annualized rate in the January-through-March period of 2026, according to data released by the Commerce Department on Thursday, April 30, 2026.

5% annualized rate in the fourth quarter of 2025. U.S. GDP is adjusted for seasonal swings and inflation.

The economic growth in the first quarter of 2026 was boosted by consumer spending, business investment, higher exports and government outlays. The prior quarter had the longest government shutdown on record.

U.S. Economy strengthened in the first three months of 2026. The first-quarter figure shows the economy headed into the Iran war on strong footing, boosted by bigger tax returns that helped offset the initial uptick in prices at the pump, according to CNN reporting.

So far, most companies have also reported robust first-quarter earnings, and while the Iran war initially spooked investors, the stock market eventually rebounded, with major indexes now at or near record highs, CNN reported.

But the Middle East conflict is now in its ninth week, and economists broadly agree that the longer it lasts, the more damage it will inflict on the US economy. It’s also prompting the Federal Reserve to delay any further rate cuts, with global oil prices still firmly above $100 a gallon, which is keeping US gas prices elevated, according to CNN.

“As long as the economy continues to grow and companies are able to grow earnings, we can see higher stock prices even in the face of higher energy prices and inflation,” Chris Zaccarelli, chief investment officer for Northlight Asset Management, said in an analyst note Thursday.

“However, the longer the war drags on, the more investors will grow nervous and we could see some pullbacks as fears ebb and flow,” Zaccarelli added. 1% in the first quarter of 2026, with the data released on Thursday, April 30, 2026. 9% in the month before March 2026.

The European Central Bank's next monetary policy decision is on Thursday, April 30, 2026, with the bank's benchmark interest rate at 2%. 1% in March 2026, according to Eurostat. 3% in March 2026.

The ongoing blockade of the Strait of Hormuz, the vital oil and gas passage, is a key source of worry for Europe as it scrambles to source oil and gas, and jet fuel, from suppliers outside the Middle East when demand and competition are already heightened, according to CNBC.

Fuel prices are displayed at a service station in Paris showing high gasoline and diesel costs due to the war in Iran, on April 8, 2026. A cargo boat navigates the sea behind a mural depicting fishes at the shoreline on April 28, 2026 on Qeshm Island, Iran in the Strait of Hormuz.

Unilever reported first-quarter 2026 underlying sales growth ahead of forecasts. Unilever said it would raise prices to offset higher costs from the Iran war.