US first-quarter GDP revised sharply higher; but consumer spending nearly stalls

WASHINGTON, June 25 (Reuters) - The U.S. system grew faster than antecedently estimated successful the archetypal quarter, but user spending astir stalled.

Gross home merchandise accrued astatine an upwardly revised 2.1% annualized complaint ‌last quarter, the Commerce Department's Bureau of Economic Analysis said successful its 3rd estimation of first-quarter GDP ‌on Thursday. Growth was antecedently reported to person precocious astatine a 1.6% pace. Economists polled by Reuters had expected that GDP maturation would ​be unrevised astatine a 1.6% rate.

The system grew astatine a 0.5% gait successful the October-December quarter. The 0.5 percent constituent upgrade to maturation past 4th reflected a downward revision to imports, mostly user and superior goods. The boost to maturation from little imports was partially offset by a crisp downgrade to user spending, which accounts for much than ‌two-thirds of the economy.

Growth successful user spending ⁠was slashed to a 0.5% complaint from the antecedently reported 1.4% pace, reflecting downward revisions to outlays connected services, including fiscal services and security arsenic good arsenic planetary travel. ⁠Part of the downward revisions to fiscal services was related to a banal marketplace selloff past quarter.

Spending appears to person picked up aboriginal successful the 2nd quarter, acknowledgment to ample taxation refunds, which person partially mitigated a surge successful gasoline ​prices stemming ​from the U.S.-led warfare with Iran. The mean taxation refund ​for the week ending May 8 was $3,276 ‌compared to $2,939 during the week ending May 9, 2025, the past disposable information from the IRS showed.

Overall economical enactment is mostly being driven by artificial intelligence-related spending, with concern business successful instrumentality expanding astatine a 15.8% rate, revised down from the antecedently estimated 17.2% pace. Outlays connected intelligence spot products roseate astatine a 13.8% pace, revised up from the antecedently estimated 11.6% rate.

Final income to backstage home purchasers, which exclude government, commercialized and inventories, accrued astatine ‌a 1.7% rate. That was a downgrade from the antecedently ​estimated 2.4% maturation pace. Profits from existent accumulation roseate astatine a $74.4 ​billion complaint past quarter, revised higher from the ​previously reported $40.4 cardinal pace. They surged astatine a $246.9 cardinal gait successful the 4th quarter.

When measured ‌from the income side, the system grew astatine ​a 1.2% complaint successful the ​January-March quarter. Gross home income was antecedently estimated to person accrued astatine a 0.9% rate. It grew astatine a 1.6% gait successful the 4th quarter.