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U.S. economy grew 2% from January-March, recovering from federal shutdown; Iran war clouds outlook
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U.S. economy grew 2% from January-March, recovering from federal shutdown; Iran war clouds outlook

The Independent·Paul Wiseman·about 1 month ago
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The U.S. economy accelerated at the start of 2026, expanding at a modest 2% pace from January through March after recovering from last fall’s 43-day federal government shutdown. But the outlook is clouded by the Iran war. The Commerce Department reported Thursday that gross domestic product — the nation’s output of goods and services — rebounded from a lackluster 0.5% expansion the last three months of 2025. The federal government’s spending and investment grew at a 9.3% annual rate in the first quarter, adding more than half a percentage point to growth after lopping off 1.16 percentage points in fourth-quarter 2025. 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. But business investment, likely driven by investments in artificial intelligence, rose at an 8.7% pace. Iran has blocked the Strait of Hormuz through which a fifth of the world’s oil and liquefied natural gas passes.…

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