U.S. Economic Growth Slowed to 1.5% in Second Quarter, Falling Short of Expectations
Consumer spending and business investment stayed strong, but rising imports shaved 1.5 percentage points from GDP growth, the Commerce Department said.
- The Commerce Department reported Thursday that U.S. GDP expanded at a sluggish 1.5% pace from April through June, while the Federal Reserve's favored PCE inflation measure rose 3.7% last month.
- Economic growth decelerated from 2.1% in the first three months of 2026, as rising imports weighed on the nation's output of goods and services during the second quarter.
- Excluding volatile food and energy prices, core consumer prices rose 3.3% from a year earlier, while employers added an average 92,000 jobs per month this year, sustaining consumer spending power.
- On Wednesday, the Fed kept its benchmark interest rate unchanged for the fifth consecutive meeting, though three regional Fed presidents dissented, arguing for higher rates to combat elevated inflation.
- Ahead of November's midterm elections, higher costs have frustrated Americans, creating a critical test for President Donald Trump and Republicans who currently hold full control of Congress.
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158 Articles
The increase in gross domestic product remains largely supported by household consumption, which offsets a slowdown in investment, as well as an increase in imports.
GDP Growth Slows in Second Quarter, But Consumer Spending Surges
The growth in Real Gross Domestic Product (GDP) slowed in the second quarter of this year, but increased consumer spending and a reduction in government spending provided bright spots, the initial estimate released by the Commerce Department on Thursday reveals.Adjusted for inflation, Real GDP increased 1.5% in the second quarter after rising 2.1% in the first quarter, according to the latest estimate by U.S. Bureau of Economic Analysis. Imports…
According to the Department of Commerce report, the personal consumption cost price index rose by 3.7% year-on-year in July.
The US economy grew 1.5% annualized in the second quarter of 2026, below market expectations.
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