The US economy grew by a modest 2% from January to March 2026, recovering after a previous government shutdown. Despite this growth, the ongoing conflict in Iran is casting a significant shadow over the economic outlook. The Commerce Department reported a rebound from a lacklustre 0.5% expansion in the previous quarter.

The US economy accelerated at the start of 2026, expanding at a modest 2 per cent pace from January through March after recovering from last fall’s 43-day federal government shutdown. But the outlook is clouded by the Iran war. The Commerce Department reported on Thursday that gross domestic product – the nation’s output of goods and services – rebounded from a lacklustre 0.5 per cent expansion the last three months of 2025. The federal government’s spending and investment grew at a 9.3 per cent...