The US economy expanded at an unexpected 2.1 per cent from January through to March, compared to year-earlier levels, the Commerce Department reported on Thursday in its final estimate of first-quarter growth.

The growth in gross domestic product — the nation's output of goods and services — marked a rebound from a sluggish 0.5 per cent in the last three months of 2025, when a 43-day federal government shutdown weighed on the economy. Thursday's numbers were an upgrade from Commerce's previous first-quarter estimate of 1.6 per cent growth.

Business investment surged, probably reflecting an investment boom in artificial intelligence. But consumer spending, which accounts for around 70 per cent of US economic activity, fell sharply from fourth-quarter 2025 and from Commerce's previous estimate in a sign that consumers may be cutting back in the face of higher gasolene prices caused by the war with Iran.