US revises Q1 GDP growth upward to 2.1% from 1.6% after downward revision in imports
New Delhi, June 26
The United States economy grew at an annual rate of 2.1 per cent in the first quarter of 2026, higher than previously estimated, according to the third estimate released by the U.S. Bureau of Economic Analysis under the Department of Commerce.
The latest estimate revised first-quarter real gross domestic product (GDP) growth upward by 0.5 percentage point from the second estimate.
US commerce department stated, "Real GDP was revised up 0.5 percentage point from the second estimate, primarily reflecting a downward revision to imports, which are a subtraction in the calculation of GDP, that was partly offset by a downward revision to consumer spending"
According to the BEA, the increase in real GDP during the January-March quarter was supported by investment, exports, government spending and consumer spending.
From an industry perspective, the growth in the economy reflected increases in real value added of 7.5 per cent for government, 4.5 per cent for private goods-producing industries and 0.8 per cent for private services-producing industries.
The leading contributors to GDP growth were the information sector, the federal government, professional, scientific and technical services, and durable goods manufacturing. These gains were partly offset by declines in retail trade, wholesale trade, and finance and insurance activities.
The US department also showed that real gross domestic income (GDI) increased 1.2 per cent in the first quarter, revised upward by 0.3 percentage point from the previous estimate.
The average of real GDP and real GDI, a broader measure of economic activity, increased 1.7 per cent during the quarter, revised up by 0.4 percentage point.
Meanwhile, real final sales to private domestic purchasers, which combines consumer spending and gross private fixed investment, increased 1.7 per cent in the first quarter. However, this figure was revised down by 0.7 percentage point from the previous estimate.
It also highlighted that corporate profits also improved during the quarter. Profits from current production increased by USD 74.4 billion in the first quarter, revised upward by USD 34 billion from the earlier estimate.
On the inflation front, the price index for gross domestic purchases increased 3.6 per cent in the first quarter, revised up by 0.1 percentage point. The personal consumption expenditures (PCE) price index rose 4.6 per cent, while the core PCE price index, which excludes food and energy, increased 4.4 per cent, unchanged from the previous estimate.
— ANI
Reader Comments
US GDP revisions are always a big deal for global markets. But I'm more concerned about their inflation numbers - 4.6% PCE is still quite high. Hope the Fed gets it under control, otherwise it could mean more rate hikes and volatility for emerging markets like India. 😬
What caught my eye is the 7.5% growth in government sector and information sector leading the way. Meanwhile, retail and wholesale trade are declining - classic signs of a shift to services and digital economy. India should take notes on transitioning its own economic structure. 📊
Good to see the US economy holding up, but the revision is largely statistical. Our Indian GDP numbers also go through similar revisions. What matters more is the trend - consumer spending slowdown and inflation still above target are worrying signs. Let's see how the next quarters play out.
As an economist, I find this mixed bag interesting. GDP revised up but GDI only at 1.2% - the gap between these two measures often signals data quality issues. Also, corporate profits up by $74 billion while real disposable income might be squeezed. Not everything is rosy despite the headline number. 📉
This feels like a classic case of looking at the glass half full. Yes, GDP is up, but consumer spending growth was revised down, and core inflation at 4.4% is still far above the 2% target. For India, the key takeaway is that US demand may not be as strong as it seems - we should brace for softer exports. 🤔
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