US Economy Slows to 1.5% Growth Rate in Second Quarter

The US economy slowed down in the second quarter, growing at a rate of 1.5% compared to the first quarter's 2.1%. The Commerce Department reported that government spending, investments, and exports all decreased, driving the deceleration. However, consumer spending remained strong, with final sales increasing by almost 4%.

White House Economic Council Director Kevin Hassett downplayed the GDP numbers, saying they were a 'full glass' rather than a 'half-full glass'. He emphasized that consumption and investment were both up significantly, despite the slower overall growth rate.

The Federal Reserve's preferred measure of inflation, the Personal Consumption Expenditures Price Index (PCE), rose 3.7% over 12 months, while core PCE came in at 3.3%. These numbers are still above the Fed's target of 2%, and may influence future interest rate decisions.

Despite the divided vote on interest rates within the Federal Open Market Committee (FOMC), Chairman Kevin Warsh signaled that he is not planning to cut rates anytime soon. He emphasized that five years of inflation above target cannot be fixed by a single month's price decreases.