U.S. Q1 2026 GDP Growth Expands Across 46 States, BEA Reports

The Commerce Department’s Bureau of Economic Analysis released Thursday data showing real GDP rose in 46 states and Washington, D.C. in Q1 2026. The national economy expanded at an annualized 2.1 percent, revised up from 1.6 percent and above the 0.5 percent growth in Q4 2025. The revision reflects a downward adjustment to imports, only partially offset by lower consumer-spending.

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Washington state posted the strongest quarterly gain at 4.5 percent, rebounding from a 0.4 percent contraction at the end of 2025, driven by its information sector. California, New Mexico, Nevada and Utah also posted growth above the national rate, giving the Far West an average of 3.6 percent. South Dakota, Nebraska and Iowa recorded declines; Delaware was flat.

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Treasury Secretary Scott Bessent said the economy is on track for 3 percent annualized growth by year-end, citing the winding down of hostilities with Iran and underlying strength. Vanguard economists reaffirmed a 3 percent 2027 growth forecast, calling AI investment a structural shift rather than a cyclical boost. The BEA linked the quarter’s improvement to higher investment and exports, noting that stronger imports partially offset the gains.

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• National Q1 2026 GDP growth: 2.1 % (revised from 1.6 %).

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• Washington state growth: 4.5 %.

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• Far West regional average: 3.6 %.

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• Declining states: South Dakota, Nebraska, Iowa; flat: Delaware.

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• AI-related capital spending projected at $765 billion in 2026, expected to reach $1.6 trillion by 2031 (?2 % of GDP).

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• “We can have something with a three in front of it this year,” — Scott Bessent, Treasury Secretary.

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• “The underlying economy has been strong.” — Scott Bessent, Treasury Secretary.

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• “This wave of investment resembles historic periods of large-scale capital expansion, such as the railroad buildout in the 19th century and the late-1990s technology boom,” — Vanguard economists.

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The projected rise in AI-related capital spending to $1.6 trillion by 2031 suggests a structural shift that could affect productivity and overall output. At that level, AI investment would represent roughly two percent of GDP, comparable to historic periods of large-scale capital expansion.

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The reports do not explain why South Dakota, Nebraska and Iowa experienced GDP declines, nor do they break down sector contributions for those states, leaving limited insight into localized downturns.

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The BEA’s second-estimate GDP release and further Treasury commentary will show if the 3 percent growth path holds. Monitoring AI investment trends and the de-escalation of U.S.–Iran tensions will shape expectations for the rest of 2026.

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