Particle.news
Download on the App Store
14 ARTICLES
·
2h ago

U.S. GDP Slows to 1.5% in Second Quarter Despite Strong Consumer and Business Demand

Large imports of AI equipment and lower federal outlays erased much of private-sector gains and left inflation above the Fed’s goal.

Image
Pineapples are on display for shoppers in a large chain food store August 19, 2008 in Glendale, California. (Photo by David McNew/Getty Images)
Image
A television displays a Kevin Warsh, chairman of the Federal Reserve press conference as traders work on the floor of the New York Stock Exchange during afternoon trading on June 17, 2026 in New York City. (Photo by Michael M. Santiago/Getty Images)

Overview

  • Thursday’s BEA advance estimate showed real GDP rose at a 1.5% annualized rate in Q2, down from 2.1% in Q1.
  • Household spending accelerated to a 3.2% annual pace and business fixed investment surged, driven in part by a rush to build AI data centers.
  • Imports of computer parts and semiconductors jumped and widened the trade deficit, which Commerce Department data show spiked to about $77.6 billion in May and subtracted from headline GDP.
  • Federal outlays fell partly because of Strategic Petroleum Reserve sales even as defense spending rose because of the war with Iran, reducing the government spending contribution to growth.
  • Price indexes stayed elevated in Q2 with broad measures above target even as core PCE showed some easing, a mix that helped prompt the Fed to hold rates with several officials voting to raise them.