{"id":63727,"date":"2026-06-25T08:38:13","date_gmt":"2026-06-25T12:38:13","guid":{"rendered":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/us-economy-shows-resilience-as-q1-gdp-revised-upward-amid-mixed-inflation-signals\/63727\/"},"modified":"2026-06-25T08:38:13","modified_gmt":"2026-06-25T12:38:13","slug":"us-economy-shows-resilience-as-q1-gdp-revised-upward-amid-mixed-inflation-signals","status":"publish","type":"post","link":"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/us-economy-shows-resilience-as-q1-gdp-revised-upward-amid-mixed-inflation-signals\/63727\/","title":{"rendered":"US Economy Shows Resilience as Q1 GDP Revised Upward Amid Mixed Inflation Signals"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_84 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"#\" data-href=\"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/us-economy-shows-resilience-as-q1-gdp-revised-upward-amid-mixed-inflation-signals\/63727\/#Key_Takeaways\" >Key Takeaways<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"#\" data-href=\"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/us-economy-shows-resilience-as-q1-gdp-revised-upward-amid-mixed-inflation-signals\/63727\/#Economic_Growth_and_Consumer_Resilience\" >Economic Growth and Consumer Resilience<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"#\" data-href=\"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/us-economy-shows-resilience-as-q1-gdp-revised-upward-amid-mixed-inflation-signals\/63727\/#Inflation_and_the_Feds_Path_Forward\" >Inflation and the Fed\u2019s Path Forward<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"#\" data-href=\"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/us-economy-shows-resilience-as-q1-gdp-revised-upward-amid-mixed-inflation-signals\/63727\/#Labor_Market_and_Manufacturing_Trends\" >Labor Market and Manufacturing Trends<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"#\" data-href=\"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/us-economy-shows-resilience-as-q1-gdp-revised-upward-amid-mixed-inflation-signals\/63727\/#Market_Reaction_and_Corporate_Highlights\" >Market Reaction and Corporate Highlights<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"#\" data-href=\"https:\/\/www2.stockmarketwatch.com\/stock-market-news\/us-economy-shows-resilience-as-q1-gdp-revised-upward-amid-mixed-inflation-signals\/63727\/#Geopolitical_and_Legislative_Headwinds\" >Geopolitical and Legislative Headwinds<\/a><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"Key_Takeaways\"><\/span>Key Takeaways<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<ul>\n<li><strong>US Q1 GDP was revised significantly higher to 2.1%<\/strong> (annualized), far outpacing the previous estimate of 1.6% and signaling a stronger start to the year than initially reported.<\/li>\n<li><strong>Inflation remains sticky<\/strong> as the May Core PCE Price Index\u2014the Fed&#39;s preferred metric\u2014rose <strong>0.3% monthly and 3.4% annually<\/strong>, meeting expectations but showing little signs of a rapid cooldown.<\/li>\n<li><strong>The labor market remains tight<\/strong> with Initial Jobless Claims falling to <strong>215K<\/strong>, lower than the 225K expected, though continuing claims edged up to <strong>1,821K<\/strong>.<\/li>\n<li><strong>Manufacturing data provided a mixed outlook<\/strong> as Durable Goods Orders fell <strong>4.5% in May<\/strong>, though the decline was less severe than the <strong>5.0% drop<\/strong> analysts had anticipated.<\/li>\n<li><strong>Tech and Banking sectors surged in <a href=\"https:\/\/stockmarketwatch.com\/movers\/premarket\" data-internallinksmanager029f6b8e52c=\"7\" title=\"Premarket Movers\">pre-market trading<\/a><\/strong> following blowout earnings from Micron (<a href=\"\/stock\/MU\">MU<\/a>) and positive stress test results for major banks like JPMorgan (<a href=\"\/stock\/JPM\">JPM<\/a>).<\/li>\n<\/ul>\n<h2><span class=\"ez-toc-section\" id=\"Economic_Growth_and_Consumer_Resilience\"><\/span>Economic Growth and Consumer Resilience<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The US economy demonstrated unexpected strength in the first quarter of 2026. The third estimate for <strong>Q1 GDP came in at 2.1%<\/strong>, a sharp upward revision from the prior 1.6% reading. This growth was supported by a <strong>3.6% rise in the GDP Price Index<\/strong>, although personal consumption growth was notably softer than expected at <strong>0.5%<\/strong>.<\/p>\n<p>Consumer spending power appears to be holding steady despite inflationary pressures. <strong>Personal Income rose by 0.7% in May<\/strong>, doubling the 0.35% growth seen in April. Similarly, <strong>Personal Spending increased by 0.7%<\/strong>, suggesting that American households continue to drive economic activity even as the cost of living remains elevated.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Inflation_and_the_Feds_Path_Forward\"><\/span>Inflation and the Fed\u2019s Path Forward<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Inflation data released today suggests the Federal Reserve&#39;s battle is far from over. The <strong>Core PCE Price Index<\/strong>, which excludes volatile food and energy costs, rose <strong>3.4% year-over-year in May<\/strong>. While this matched economist estimates, it remains well above the Fed&#39;s 2% target, likely keeping interest rate cuts off the table for the immediate future.<\/p>\n<p>The <strong>headline PCE Price Index rose 4.1% annually<\/strong>, driven by a <strong>0.4% monthly increase<\/strong>. These figures, combined with a <strong>4.4% Q1 Core PCE revision<\/strong>, indicate that price pressures are proving more persistent than policymakers had hoped during the start of the year.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Labor_Market_and_Manufacturing_Trends\"><\/span>Labor Market and Manufacturing Trends<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The US labor market continues to defy cooling efforts. <strong>Initial Jobless Claims for the week ending June 20 fell to 215K<\/strong>, down from a revised 223.5K the previous week. However, <strong>Continuing Claims rose to 1,821K<\/strong>, the highest level in several weeks, suggesting that while layoffs are low, finding new employment may be taking longer for some workers.<\/p>\n<p>In the manufacturing sector, <strong>Durable Goods Orders dropped 4.5% in May<\/strong>, primarily due to a slump in the volatile transportation segment. Excluding transportation, however, <strong>orders actually rose 1.3%<\/strong>, beating the 0.6% estimate. This indicates that underlying demand for long-lasting goods remains healthy despite high borrowing costs.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Market_Reaction_and_Corporate_Highlights\"><\/span>Market Reaction and Corporate Highlights<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Wall Street reacted positively to the data dump and a series of corporate catalysts. Micron (<a href=\"\/stock\/MU\">MU<\/a>) shares skyrocketed <strong>18% in pre-market trading<\/strong> following a &quot;blow-out&quot; earnings report and stellar guidance. IBM (<a href=\"\/stock\/IBM\">IBM<\/a>) also gained <strong>2.5%<\/strong> after unveiling a breakthrough <strong>sub-1nm chip technology<\/strong>, signaling a path to production within five years.<\/p>\n<p>The banking sector saw broad gains after the Federal Reserve&#39;s latest bank stress tests. JPMorgan (<a href=\"\/stock\/JPM\">JPM<\/a>) announced a new <strong>$50 billion share buyback program<\/strong> and raised its dividend to <strong>$1.65 per share<\/strong>. Other major lenders, including Goldman Sachs (<a href=\"\/stock\/GS\">GS<\/a>), Morgan Stanley (<a href=\"\/stock\/MS\">MS<\/a>), and Citigroup (<a href=\"\/stock\/C\">C<\/a>), also announced dividend hikes ranging from 10% to 19%.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Geopolitical_and_Legislative_Headwinds\"><\/span>Geopolitical and Legislative Headwinds<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Outside of the economic data, political tensions are rising. In Washington, Speaker Mike Johnson is facing a <strong>House floor blockade<\/strong> from GOP hardliners over the SAVE America Act. The legislative gridlock threatens to freeze House activity unless a resolution is reached with former President Trump during a scheduled meeting this afternoon.<\/p>\n<p>On the international front, Iran&#39;s Parliament Speaker Qalibaf issued a sharp critique of US foreign policy. He dismissed US claims regarding unfrozen assets, stating that the only &quot;crop&quot; Iran is harvesting is <strong>&quot;decades of mistrust&quot;<\/strong> planted by American policies, further highlighting the strained diplomatic relations between the two nations.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Key Takeaways US Q1 GDP was revised significantly higher to 2.1% (annualized), far outpacing the previous estimate of 1.6% and [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":50383,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center 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