Economy picked up in early 2026, but inflation jumped, too

The U.S. economy grew at a 2 percent pace in the first three months of the year, as higher investment and a rebound in government spending buoyed business activity while consumers showed signs of fatigue amid rising prices.

Growth accelerated from the previous quarter, which was hurt by the longest government shutdown in history, according to the Commerce Department report on gross domestic product, the sum of goods and services made in the United States. But it fell short of Wall Street analysts' expectations of 2.2 percent growth and is running below the Congressional Budget Office's estimate of the economy's potential to grow without aggravating inflation.