Sluggish US Economy Expands 1.5% in Q2 Amid Stubborn Inflation

The US economy grew at a sluggish pace of 1.5% in Q2, with consumer spending rising at a 3.2% annual clip, up from 0.5% in the January-March period.

However, imports weighed on growth, rising at an 11.5% pace and shaving 1.5 percentage points off second-quarter GDP growth.

The Federal Reserve's favored measure of inflation grew more slowly last month but remained above its 2% target, with the personal consumption expenditures price index rising 3.7% from June 2025.

The Fed chose to leave its benchmark interest rate unchanged for the fifth straight meeting, but three regional presidents dissented, saying they wanted to raise rates to combat elevated inflation.