The Bureau of Economic Analysis releases the second estimate of Q1 2026 GDP at 8:30 AM ET Thursday, alongside the first read on Q1 corporate profits. The advance estimate published April 30 put real GDP at 2.0% annualized, a rebound from the 0.5% Q4 2025 pace. The second estimate uses harder trade and inventory data, and historically moves the headline by between 0.1 and 0.4 percentage points. The number the analysts will care about sits below the top line.
Consumer spending was the soft spot in the advance print. Personal consumption rose only 1.6% in Q1, the slowest pace since Q3 2024, dragged by a sharp pullback in goods after the tariff front-running that pulled spending into late Q4. Services held at roughly 2.4%. A revision higher would suggest the late-quarter pullback was overstated. A revision lower would confirm that the household side was carrying real weight into Q2, which lines up with the softer April retail sales (+0.1% ex-autos) and the slow drift higher in continuing jobless claims (1.78 million the week of May 16).
The other line to watch is real final sales to private domestic purchasers, which strips out trade, inventories, and government. The advance estimate had this at 2.5%, materially stronger than the headline. This is the Fed’s preferred gauge of underlying demand and the one Chair Powell has cited as the reason the committee is not in any hurry to cut. A meaningful downward revision here, combined with a softer consumer number, would be the cleanest case for a September cut to gain probability ahead of Friday’s PCE print.
Corporate profits get their first quarterly print with the second estimate. Domestic non-financial profits had risen 3.4% quarter over quarter in Q4 2025, with the margin story holding despite tariff cost pressure. Q1 is the first quarter where the 20% baseline tariff was in effect for the full period. The split between profits with capital consumption adjustment and profits before tax will show whether companies were able to push the costs through to prices or whether margins started to compress. The S&P 500 operating margin came in at 12.8% for Q1 per FactSet’s tally, down from 13.2% in Q4, so the BEA national-accounts measure should show similar pressure.
Inventories were a 0.84 percentage point drag on the advance estimate. The May 14 wholesale inventories release showed a smaller drawdown than the BEA’s preliminary assumption, so the revision is more likely to add to GDP than subtract. Net exports were a 0.30 percentage point drag, and the April trade data has since shown the goods deficit narrowing more than expected as the tariff-driven import surge unwound. Both lines tilt the revision risk higher on the headline.
The market reaction is rate-driven. A consumer spending revision more than 0.3 points in either direction repositions September Fed funds odds inside an hour. A weak consumer print stacked against Wednesday’s FOMC minutes language sets up Friday’s April PCE as the deciding data point of the week.