The US economy picked up steam in the beginning of the year as the United States and Israel launched a destabilizing war with Iran that has jacked up prices and is still ongoing.
Gross domestic product, which measures all the goods and services produced in the economy, registered a 2% annualized rate in the January-through-March period, the Commerce Department said Thursday, up sharply from the fourth quarter’s 0.5%. That was slightly lower than the 2.3% rate economists projected in a poll by data firm FactSet. GDP is adjusted for seasonal swings and inflation.
US economic growth in the first quarter was boosted by resilient consumer spending, a massive uptick in business investment, higher exports (which contribute to GDP), and government outlays that came back online after the longest government shutdown on record in the prior quarter.
A key gauge of underlying demand in the economy even strengthened sharply in the first three months of the year.
The first-quarter figure shows the economy headed into the Iran war on strong footing, boosted by bigger tax returns that helped offset the initial uptick in prices at the pump. So far, most companies have also reported robust first-quarter earnings, and while the Iran war initially spooked investors, the stock market eventually rebounded, with major indexes now at or near record highs.
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