US Economy Expands at Sluggish Pace Amid Rising Mortgage Rates and Inflation Concerns

The US economy expanded at a sluggish pace of 1.5% in the second quarter, according to recent data from the Commerce Department.

This growth rate is lower than the 2.1% seen in the first three months of 2026 and below economists' expectations.

However, consumer spending rose by 3.2% annually, which accounts for about 70% of US economic activity.

The Federal Reserve's favored measure of inflation grew more slowly last month but remained above the central bank's 2% target.

The average long-term US mortgage rate reached its highest level in a year at 6.66%, according to Freddie Mac, affecting prospective homebuyers and refinancing borrowers.