Real GDP grew at an annualized rate of +1.4% in Q1 2026, the advance estimate from the Bureau of Economic Analysis. That compares to +2.3% in Q4 2025 and marks the slowest quarter since Q2 2022. The first revision will print in late May; revisions to the advance estimate average 0.6 percentage points in either direction.
The drag came primarily from inventories, which subtracted 0.7 percentage points as businesses worked off the pre-tariff front-loading that inflated Q4 numbers. Net exports also subtracted 0.4 points as import volumes remained elevated. Government spending added 0.3 points.
Consumer spending contributed +1.9 points on an annualized basis. Services spending held up (health care, housing, food services). Goods spending fell 0.4% on a quarter-over-quarter annualized basis, the first goods decline in five quarters. The underlying demand picture looks softer than the headline but not yet recessionary; the Atlanta Fed’s current Q2 tracker sits around 2.1%.