US Q1 GDP revised to 1.6% as spending and investment slow

The U.S. economy grew at a 1.6% annualized rate in the first quarter of 2026, revised down from an earlier estimate of 2.0%, the Commerce Department’s Bureau of Economic Analysis reported Thursday. The revision reduced the advance estimate by 0.4 percentage point.

The BEA attributed the downgrade mainly to weaker consumer spending and lower business investment. The agency said businesses added to inventories at a slower pace than previously estimated and household spending on services, including health care, was weaker than earlier projected.

The BEA listed exports, investment, consumer spending and government spending as contributors to first-quarter growth, while imports rose and subtracted from the calculation. “Real GDP was revised down 0.4 percentage point from the advance estimate, primarily reflecting downward revisions to investment and consumer spending,” the agency wrote.

Separate Commerce Department figures for April showed consumer spending increased 0.5% for the month, in line with forecasts. Personal income was unchanged in April, missing expectations for a 0.4% rise.

Financial markets reacted modestly to the revised GDP reading. U.S. stock index futures fell after the release but recovered from earlier session lows. Treasury yields edged lower, with declines concentrated in longer-dated maturities, and the U.S. Dollar Index slipped about 0.1% to roughly 99.12 during the American session.

Economists and investors are monitoring incoming data for signs of how high borrowing costs and persistent inflation may affect growth. The revised Q1 figure follows stronger readings in prior quarters and highlights slower activity in consumer spending and business investment during the January-March period.

Gross domestic product measures the total value of goods and services produced in the United States and is closely watched by policymakers and markets. The updated first-quarter figure arrives as market participants continue to focus on the Federal Reserve’s expected interest rate path and upcoming inflation and labor reports.