Let's break down the GDP to see what had changed from the previous quarter.
GDP growth = G + I + C + NE
Q4 GDP (2025) = (-0.99) + 0.4 + 1.3 + (-0.22) = 0.49 (0.5)
Q1 GDP (1st estimate) = 0.73 + 1.48 + 1.08 + (-1.3) = 1.99 (2)
The US government spending (G) had been increased to boost the US GDP growth. However, the spiking inflation was causing consumption (C) to fall from 1.3 to 1.08 and this decline in C had boosted the investment (I) because of increasing stockpiles (unsold inventories). The Iran war had caused the international trades to decline and it had also affected the US exports (Net Export was negative).
Therefore, this is not an impressive GDP report because we can see weaknesses ahead.
