US First-Quarter GDP Revised Sharply Higher; But Consumer Spending Nearly Stalls

• The U.S. economy grew faster than previously estimated in the first quarter, but consumer spending almost stalled. Gross domestic product (GDP) increased at an upwardly revised 2.1% annualized rate last quarter, the Commerce Department's ​Bureau of Economic Analysis said in its third estimate of first-quarter GDP on Thursday. Growth ‌was previously reported to have advanced at a 1.6% pace. Economists polled by Reuters had expected that GDP growth would be unrevised at a 1.6% rate.
• Growth in consumer spending was slashed to a ​0.5% rate from the previously reported 1.4% pace, reflecting downward revisions to outlays on services, including financial services and ​insurance as well as international travel. Part of the downward revisions to financial services was related to a stock market selloff last quarter.
• Looking ahead, spending appears to have picked up early in the second quarter, thanks to large tax refunds, which have partially ​mitigated a surge in gasoline prices stemming from the U.S.-led war with Iran. The average tax refund ​for the week ending May 8 was $3,276 compared to $2,939 during the week ending May 9, 2025, the last available data ‌from the ⁠IRS showed.
• Final sales to private domestic purchasers, which ​exclude government, trade and inventories, ​increased at a 1.7% ⁠rate. That was a downgrade from the previously estimated 2.4% growth pace. Profits from current production rose at a $74.4 billion rate last quarter, revised higher from the previously ​reported $40.4 billion pace. They surged at a $246.9 billion pace in the fourth quarter

(Source: Reuters)