The U.S. economy grew faster than initially reported at the start of 2026. Real gross domestic product rose at a 2.1% annual rate from January through March, according to the third and final estimate released June 25 by the Bureau of Economic Analysis (BEA). Growth picked up sharply from the fourth quarter of 2025, when the economy expanded just 0.5%.
The new reading upgrades BEA’s earlier estimate of 1.6%. BEA raised the number by half a percentage point. The change mostly reflected a downward revision of imports, which the government subtracts when calculating GDP. A downward revision to consumer spending offset part of that gain.
Investment led the quarter, followed by exports, government spending, and consumer spending. By industry, information was the largest contributor to growth. The federal government, professional and technical services, and durable goods manufacturing also contributed to the total. Retail trade, wholesale trade, and finance and insurance pulled the other way.
Consumer spending stayed positive but lost momentum. While it still added to growth, it ranked last among the four drivers after leading late in 2025. Real final sales to private domestic purchasers, which pair consumer spending with business fixed investment, grew 1.7%, a downward revision of 0.7 percentage points. People kept spending money, just at a slower rate.
Prices kept climbing through the quarter, and the personal consumption expenditures price index rose 4.6%, revised up slightly. The measure that strips out food and energy rose 4.4%. Both stayed well above the Federal Reserve’s 2% target. That suggests input costs and wages may keep pressuring small business margins.
Corporate profits offered a brighter note, rising $74.4 billion in the quarter. Growth also reached most of the country, with real GDP up in 46 states and the District of Columbia. Washington state led at a 4.5% annual rate, while South Dakota fell 1.6% and Delaware held flat.
BEA releases its first look at second-quarter growth on July 30. That report will show whether the consumer pullback deepened or eased through the spring.
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