After a government shutdown slowed the U.S. economy to a 0.5% annualized pace in the fourth quarter, gross domestic product (GDP) rebounded with 2% growth in the first quarter. AI investments helped drive the growth, with nonresidential business investment surging 10.4%, the highest rate in nearly three years.
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Forget margin or options. Here's how the pros trade QQQHowever, economists were expecting the economy to grow 2.3% during the quarter. Consumer spending, which accounts for roughly two-thirds of GDP, grew by 1.6% compared to 1.9% in the fourth quarter.
Oil Surge Threatens Growth, Pressures Consumers
Furthermore, the U.S.-Iran war risks lowering GDP and spending as oil and gas prices surge, pressuring household budgets.
“American households are getting squeezed,” said Navy Federal Credit Union Chief Economist Heather Long. “Many are not able to save right now as they face ongoing high costs for gas, electricity, and healthcare.” That’s reflected in the U.S. savings rate, which recently fell to 3.6%, marking the lowest level since late 2022.