U.S. GDP growth was revised down to 1.6% as consumer spending and corporate profits slowed

The downward revision from the 2.0 percent advance estimate reflected weaker investment and consumer spending. Within investment, the bureau said the primary driver was a drop in private nonfarm inventory investment, led by manufacturing and retail trade. Within consumer spending, a downward revision to services — particularly health care — was partly offset by stronger spending on goods including recreational vehicles, pharmaceuticals, and food and beverages.

Corporate profits grew $40.4 billion in the first quarter, a sharp deceleration from the $246.9 billion gain recorded in the fourth quarter of 2025, the bureau said. Real gross domestic income rose 0.9 percent in the quarter, compared with 1.6 percent in the prior quarter. Real final sales to private domestic purchasers, which combines consumer spending and gross private fixed investment, increased 2.4 percent.

The first-quarter result still marked an acceleration from the fourth quarter of 2025, when real GDP grew just 0.5 percent. Exports, investment, consumer spending, and government spending all contributed positively to growth in the quarter, while a rise in imports — which are subtracted in GDP calculations — weighed on the total.

Inflation remained elevated. The personal consumption expenditures price index rose 4.5 percent in the first quarter, unchanged from the advance estimate, while the PCE price index excluding food and energy was revised up 0.1 percentage point to 4.4 percent.

The revision drew pointed commentary from Allianz Trade Americas senior economist Dan North, who called it unusual in scale. "You know, losing four tenths from the previous reading, you don't often see a drop that big, so this is pretty remarkable news, I would think," he said in an interview with the Washington Examiner.

The Bureau of Economic Analysis is scheduled to release a third estimate of first-quarter GDP, along with corporate profits, state GDP, and state personal income data, on June 25, 2026.