US Economy Slows to 1.5% Growth Amid Inflation Concerns

The US economy grew at a sluggish 1.5% pace in the second quarter of this year, weighed down by rising imports. Despite the slow growth, consumer spending remained strong, increasing at an annual rate of 3.2%. The Commerce Department reported that business investment, excluding housing, rose at an 8.4% pace.

Olu Sonola, head of US economics at Fitch Ratings, said 'The consumer rescued the quarter.' However, he noted that the surge in imports underpinning AI investment does not automatically translate into a larger boost to GDP.

The Federal Reserve's preferred measure of inflation, personal consumption expenditures (PCE) price index, rose 3.7% last month from June 2025 but remained above the central bank's 2% target. Core consumer prices were up 3.3% from a year earlier, slightly lower than the previous increase.