<\/p>\n
The US economy grew at a weaker-than-expected pace in the second quarter despite a pickup in consumer spending and solid business investment.<\/p>\n
Inflation-adjusted gross domestic product increased an annualised 1.5% in the period, according to an advance estimate issued Thursday by the Bureau of Economic Analysis.<\/p>\n
A decline in net exports, which can be volatile from quarter to quarter, masked strength in underlying demand. Consumer spending, which comprises about two-thirds of economic activity, rose at a 3.2% rate. Business investment continued to boom amid a rush to invest in artificial intelligence.<\/p>\n
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Meanwhile, the Federal Reserve\u2019s preferred measure of inflation \u2014 the personal consumption expenditures price index \u2014 fell 0.1% last month from May on the back of lower gasoline prices. Excluding food and energy, it rose 0.1%.<\/p>\n
Indicator
\nActual
\nEstimate<\/p>\n
GDP (2Q)
\n+1.5%
\n\u00a0 +2.0%<\/p>\n
Personal consumption (2Q)
\n+3.2%
\n\u00a0 +2.3%<\/p>\n
PCE price index (June, MoM)
\n-0.1%
\n\u00a0 -0.1%<\/p>\n
PCE price index, excl. food, energy (June, MoM)
\n+0.1%
\n\u00a0 +0.2%<\/p>\n
The report highlights an economy that\u2019s so far powering through the fallout of the Iran war. While the conflict has pushed prices higher and weighed on sentiment, a slide in gasoline costs at the end of the quarter alongside higher-than-usual tax refunds and sales promotions helped support household spending.<\/p>\n
Separate data out Thursday showed inflation-adjusted consumer spending climbed a robust 0.4% in June, matching the strongest since July 2025.<\/p>\n
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The massive AI investment push is also playing a critical role. After the Fed decided to keep interest rates unchanged on Wednesday, Chairman Kevin Warsh described the economy\u2019s resilience as \u201cimpressive\u201d but noted the \u201cmost striking\u201d feature of the economy is the strength of business investment.<\/p>\n
Business investment remained a key driver of growth in the second quarter. Big technology firms including Meta Platformsband Microsoft are aggressively building out data centres and investing in AI, despite investors\u2019 concerns about whether it will pay off.<\/p>\n
\u00a9 2026 Bloomberg<\/p>\n
#GDP #grows #lessthanexpected #strong #consumers<\/p>\n","protected":false},"excerpt":{"rendered":"
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