US Economy Expands Slowly Amid Stubborn Inflation
The US economy expanded at a sluggish 1.5% pace in the second quarter, weighed down by rising imports and inflation remaining stubbornly high above the Federal Reserve's target of 2%. The Commerce Department reported that growth in gross domestic product decelerated from 2.1% in the first three months of this year.
Despite the slow growth, consumer spending rose at a 3.2% annual clip, driven by strong job market and increased investment in artificial intelligence. Business investment excluding housing also saw an 8.4% increase, down from 10.6% in the previous quarter but still reflecting a surge in AI investment.
The imports shaved 1.5 percentage points off second-quarter GDP growth, partly due to a surge in shipments of computer chips and other products supporting AI investment.