The US economy accelerated

Data recently released by the Bureau of Economic Analysis of the US Department of Commerce showed that gross domestic product (GDP) increased by 2% in the first quarter (adjusted on a yearly basis), lower than forecast in a Reuters survey of economists (2.3%).

Most of the growth came from a recovery in government spending (up 9.3%) following the shutdown. In the fourth quarter of 2025, US economic growth slowed to 0.5% due to reduced federal budget spending.

In the first three months of the year, US spending on artificial intelligence (AI) and data centers exploded, increasing by 8.7%. However, consumer spending – the main driving force of the economy, continued to slow down at 1.6%, compared to 1.9% in the last quarter of 2025. Spending on both goods and services decelerated.

Theo Reutersthe rising cost of living makes the majority of Americans dissatisfied with the way President Donald Trump is running the economy. This is a political risk for the Republican Party before the midterm elections in November.

But with the stock market, investors remain optimistic. “As long as the economy continues to grow and companies can increase profits, we can expect to see higher stock prices, even as energy prices and inflation rise,” said Chris Zaccarelli, chief investment officer of Northlight Asset Management.

The Federal Reserve (Fed), on April 29, announced it would keep the base interest rate unchanged, citing “high levels of uncertainty” arising from the Middle East conflict. According to CNNmost experts warn that the longer the war lasts, the more severe damage it will cause to the US economy. However, predicting the exact impact is not easy.

Carl Weinberg, chief economist at High Frequency Economics, admitted that it is difficult to forecast US GDP growth. “President Trump’s war with Iran led to a complete blockade of the Strait of Hormuz. We don’t know how to model the impact of that event because we have never seen anything like it,” he said.