""This is a split-screen economy," Heather Long, chief economist at the Navy Federal Credit Union, wrote. "Companies and investors involved in AI are on fire. Meanwhile, middle and moderate income households are struggling with high gas prices ... Consumption is slowing as people are struggling to manage all their bills and growing more concerned about the future.""
"The Commerce Department reported that gross domestic product rebounded from a lackluster 0.5% expansion in the last three months of 2025, with federal government spending and investment growing at a 9.3% annual rate in the first quarter."
"Growth in consumer spending, which accounts for 70% of U.S. economic activity, slowed to 1.6% in the first quarter from 1.9% at the end of 2025, with spending on goods and services declining."
The U.S. economy expanded at a modest 2% from January to March 2026, recovering from a previous 0.5% growth. Federal government spending increased significantly, contributing to growth. Consumer spending slowed to 1.6%, with declines in goods and services. Business investment rose, particularly in artificial intelligence, while the housing market continued to decline. Imports surged, negatively impacting growth. Despite challenges, a measure of underlying economic strength grew at 2.5%, indicating some resilience in consumer spending and private investment.
Read at Fortune
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