US economic growth accelerated to an annualized 2% in the first quarter, supported by solid consumer and business demand after a late-2025 government shutdown. Consumer spending rose 1.6%, driven by services, while business investment jumped 10.4%, led by AI-related outlays. The economy has remained resilient despite higher oil prices and supply disruptions from the Iran war, though risks persist if consumers turn cautious. Inflation pressures intensified, with the Fed’s preferred PCE index risi

US economic growth accelerated to an annualized 2% in the first quarter, supported by solid consumer and business demand after a late-2025 government shutdown. Consumer spending rose 1.6%, driven by services, while business investment jumped 10.4%, led by AI-related outlays. The economy has remained resilient despite higher oil prices and supply disruptions from the Iran war, though risks persist if consumers turn cautious. Inflation pressures intensified, with the Fed’s preferred PCE index rising 0.7% in March and 3.5% year on year, partly due to surging gasoline prices. The Federal Reserve held rates steady but signaled growing internal divisions.