US economy grows 1.6% in 1Q, below estimates

The US economy expanded at an annualized rate of 1.6% in the first quarter, falling short of estimates, according to revised data released Thursday by the Commerce Department.

The agency’s second estimate of gross domestic product (GDP) showed the economy grew at a slower pace than the 2% pace projected in a preliminary estimate published last month.

The US economy had grown 0.5% in the final quarter of 2025 and recorded overall growth of 2.1% last year.

Growth in the January-March period was driven by increases in exports, investment, consumer spending and government spending, while rising imports weighed negatively on GDP calculations.

The personal consumption expenditures (PCE) price index, the Federal Reserve's preferred inflation gauge, increased 4.5% in the first quarter, unchanged from the preliminary estimate.

It was the strongest quarterly increase since the third quarter of 2022, following a 2.9% rise in the previous quarter. Core PCE, which excludes food and energy prices, was revised upward to 4.4% from 4.3% for the first quarter.

The index posted its largest increase since the first quarter of 2023, following a 2.7% rise in the previous quarter.

*Writing by Gizem Nisa Demir in Istanbul