US economic growth likely accelerated in the first quarter on a rebound in government spending after a crippling government shutdown, but the pickup is expected to be short-lived as the war with Iran drives up gasoline prices and squeezes household budgets.
The anticipated increase in gross domestic product last quarter also would reflect robust growth in business investment in equipment, fueled by an artificial intelligence spending boom and the building of data centers underpinning the technology, Reuters reported.
The Commerce Department’s advance estimate of first-quarter gross domestic product on Thursday is, however, expected to show consumer spending losing further momentum even before the US-Israeli war with Iran raised the average US gasoline price to above $4 a gallon.
“We remain in relatively slow growth mode, nothing exciting,” said Brian Bethune, an economics professor at Boston College. “There’s nothing really to get a good fire going. There are some warm embers, but there is no fire out there.“
