US economy grows 2% as layoffs plunge to 55-year low, inflation lingers
The US economy grew at a 2% annualized rate in the first quarter of 2026, slightly below expectations, as consumer spending cooled amid high prices and prior interest rate hikes. Jobless claims fell to 189,000, the lowest since 1969, highlighting a resilient labor market despite moderating growth and inflation remaining above the Federal Reserve's target. Core inflation rose 3.2% year-over-year in March, driven partly by higher energy costs, while stock markets rallied on confidence in continued economic expansion.
- ▪The US economy expanded at a 2% annualized pace in the first quarter, slightly below the 2.2% to 2.3% forecast.
- ▪Initial jobless claims dropped to 189,000, the lowest level since 1969, indicating a strong labor market.
- ▪Core inflation increased by 3.2% year-over-year in March, remaining above the Federal Reserve's 2% target.
- ▪The Dow Jones Industrial Average rose over 800 points as investors reacted positively to the economic data.
- ▪Stephanie Alston noted that falling continuing claims may reflect benefit exhaustion rather than reemployment, suggesting hidden labor market weakness.
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Business US economy grows 2% as layoffs plunge to 55-year low, inflation lingers By Ariel Zilber Published April 30, 2026, 4:59 p.m. ET Fresh data showed the US economy grew at a 2% annualized pace in the first quarter while core inflation rose 3.2% year-over-year in March as data shows a resilient, if uneven, recovery. Economic growth came in a touch softer than expected, with the Commerce Department reporting a 2% annualized expansion in the first quarter — just below the roughly 2.2% to 2.3% pace economists had penciled in heading into the release. The miss reflects more cautious consumer spending as households grapple with higher prices and the lingering effects of past interest rate hikes.
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