MBA Economist Weighs In on Q1 GDP Figures

(Image courtesy of Polina Zimmerman/pexels.com)

The Bureau of Economic Analysis April 30 released Q1 gross domestic product advance estimate data, finding that it increased at an annual rate of 2%.

This compares with 0.5% in Q4 2025.

“This first estimate for the quarter showed faster growth in business spending, particularly for IT equipment and software, which together contributed more than 1.3% of the quarter’s growth,” said MBA SVP and Chief Economist Mike Fratantoni. “Consumer spending increased at just a 1% rate during the quarter, with growth in spending on services, particularly health care, while spending on goods was flat. The personal savings rate dropped to 3.6% in March 2026, down from 5.1% a year ago, indicating that more consumers are stretching to maintain their spending.”

“Inflation jumped higher during the quarter, with the PCE index increasing at a 4.5% annualized rate, up from 2.9% in the fourth quarter,” Fratantoni continued. “Looking just at March data, the PCE index was up 3.5% compared to last year, with core PCE up 3.2%. This re-acceleration in inflation, driven by the jump in energy prices, will be enough to keep the Fed on hold for the foreseeable future.”