Data released by the Bureau of Economic Analysis under the US Department of Commerce indicates that gross domestic product (GDP) increased by 2% in the first Quarter (seasonally adjusted annual rate). This figure is lower than the 2,3% forecast in Reuters' survey of economists.
Much of this growth stemmed from a recovery in government spending, which rose 9,3% following a period of operational shutdown. In the fourth Quarter of 2025, US economic growth slowed to 0,5% due to reduced federal budget spending.
During the first three months, the US saw a surge in spending for artificial intelligence (AI) and data centers, increasing by 8,7%. However, consumer spending, the economy's main driver, continued to slow, reaching 1,6% compared to 1,9% in the last Quarter of 2025. Spending on both goods and services decelerated.
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Consumers shop at a supermarket in new york on january 22. Photo: AFP. |
According to Reuters, rising living costs have left most Americans unhappy with President Donald Trump's management of the economy. This presents a political risk for the Republican Party ahead of the november midterm elections.
Despite this, investors in the stock market remain optimistic. Chris Zaccarelli, Chief Investment Officer at Northlight Asset Management, stated, "As long as the economy continues to grow and companies can increase profits, we may see stock prices rise, even with increasing energy prices and inflation".
The Federal Reserve (Fed), on april 29, announced it would keep basic interest rates unchanged, citing a "high level of uncertainty" stemming from the Middle East conflict. According to CNN, most experts warn that a prolonged conflict would severely damage the US economy. However, predicting the exact impact is difficult.
Carl Weinberg, chief economist at High Frequency Economics, admitted that predicting US GDP growth is very challenging. He stated, "President Trump's war with Iran led to a complete blockade of the Strait of Hormuz. We do not know how to model the impact of that event because we have never seen anything similar".
By Phi An (based on AP, Reuters, CNN)
