US Economy Powers Through Iran War Fallout

The US economy grew at an annualized rate of 1.5% in the second quarter, lower than expected despite strong consumer spending and business investment.

Consumer spending, which accounts for about two-thirds of economic activity, rose at a 3.2% rate, while business investment continued to boom amid a rush to invest in artificial intelligence.

The decline in net exports masked strength in underlying demand, with the Federal Reserve's preferred measure of inflation, the personal consumption expenditures price index, falling 0.1% last month from May due to lower gasoline prices.

The data highlights an economy that is resilient and has so far weathered the fallout from the Iran war, which had pushed prices higher and weighed on sentiment.