U.S. Economy Slumps to 1.5% Growth Rate Amid Rising Inflation

The U.S. economy experienced sluggish growth in the second quarter, expanding at a pace of 1.5% from April to June. This slowdown is attributed to rising imports, which weighed on growth.

Despite this deceleration, consumer spending rose, providing some optimism for the American economy. The Commerce Department reported that personal consumption expenditures (PCE) price index, favored by the Fed, increased 3.7% last month from June 2025, down from a 4.1% year-over-year increase in May.

The Federal Reserve's benchmark interest rate remained unchanged for the fifth straight meeting, despite calls from three regional presidents to raise rates and combat elevated inflation. Inflation has been stubbornly stuck above the Fed's 2% target, frustrating Americans ahead of November's midterm elections.