U.S. GDP expanded at a 2% annual rate in Q1 2026, even as war in Iran triggered a 60%+ oil price spike (Brent crude hit $120/bbl from $70/bbl prewar). The Commerce Department’s data captured the economy’s resilience before the Strait of Hormuz closure disrupted global energy markets.

The conflict’s first weeks caused July crude contracts to exceed $100/bbl, raising fears of prolonged shortages. Despite near-historical low consumer sentiment and weak hiring, consumption—70% of GDP—held steady, with personal spending up 1.6% slightly above expectations, particularly among top-income households.

Investment, consumer, and government spending remained positive before the war’s impact. The resilience underscores the economy’s ability to weather external shocks, though rising energy costs could pose challenges for businesses and consumers as prices remain elevated.

The Commerce Department’s Q1 2026 GDP data revealed the U.S. economy’s strength amid geopolitical turmoil, with consumer spending proving more stable than expected despite higher oil prices.