US Economy Expands at Sluggish 1.5 Percent Pace in Second Quarter

The US economy expanded at a sluggish 1.5% pace from April through June, according to the Commerce Department's report on Thursday. This growth is lower than the previous quarter's 2.1% and below economists' expectations.

Rising imports weighed heavily on growth, but consumer spending rose, providing some relief. The Federal Reserve's favored measure of inflation, personal consumption expenditures (PCE) price index, rose 3.7% last month from June 2025, down from a 4.1% year-over-year increase in May.

The PCE price index, excluding volatile food and energy prices, was up 3.3% from a year earlier, little-changed from the 3.4% increase in May. The Fed left its benchmark interest rate unchanged for the fifth straight meeting on Wednesday, but three regional Fed presidents dissented, saying they wanted to raise rates to combat elevated inflation.