U.S. first‑quarter GDP rises 2% as investment and government spending boost growth

The United States reported an annualized 2.0 percent growth in gross domestic product for the first quarter, falling short of the 2.3 percent forecast. The expansion was driven primarily by a 10.4 percent surge in non‑residential investment and a 4.4 percent increase in government spending, which together added roughly 2.1 percentage points to the quarterly increase. Consumption grew modestly at 1.6 percent, with health‑care expenditures accounting for nearly half of that rise.

Computer and software investment surged, rising 67.4 percent and 22.6 percent respectively, reflecting continued demand in the AI sector, while factory construction and residential investment continued to decline. Overall inflation eased to 4.5 percent, but prices for computers and related equipment jumped 18.5 percent. Analysts note that the stronger‑than‑expected growth may be temporary, with the economy described as “thriving on borrowed time” amid lingering fiscal pressures and higher price growth.

The data suggest a mixed outlook: robust investment and federal outlays are offset by weakening consumer discretionary spending and persistent inflation pressures.