US gross domestic product (GDP) accelerated to an annual rate of 2% in the first three months of 2026, though consumer spending is slowing as the war with Iran continues to impact energy prices.
The last GDP reading for the fourth quarter of 2025 showed that US economic growth slowed to an annual pace of 0.5%, largely due to a contraction in government spending after massive layoffs of federal workers last year. The federal government is down 355,000 workers, or 11.8% of the workforce, since October 2024, according to the Bureau of Labor Statistics.
