U.S. Q1 GDP Revised Down to 1.6%, Missing Forecast; Core Inflation Ticks Higher

The U.S. economy expanded at a slower pace than initially estimated, as the Commerce Department on May 28, 2026 revised first-quarter annualized GDP growth to 1.6%, missing the 2.0% consensus forecast. The reading still marked a notable improvement from the prior quarter’s 0.5% gain. Inflation proved stickier than expected. The core personal consumption expenditures price index rose at a 4.4% annualized rate, above the 4.3% estimate and the previous 2.7%. Inflation-adjusted consumer spending edged up just 0.1%, following an upward revision to 0.3% in the fourth quarter. The data, a preliminary revision subject to further updates, underscores an uneven recovery and persistent price pressures. Markets will scrutinize subsequent GDP revisions, employment figures and consumption data to gauge the Federal Reserve’s next policy moves.