US Economy Stalls at 1.5% Growth Amid High Inflation Concerns

The US economy grew at a sluggish 1.5% pace from April to June, according to the Commerce Department's latest report. This slowdown in growth is attributed to rising imports, which weighed heavily on the overall GDP figure.

Despite this, consumer spending remained strong, increasing at a 3.2% annual clip, up from 0.5% in the previous quarter. Business investment also showed resilience, with a rise of 8.4% excluding housing, driven by a surge in AI-related investments.

The imports shaved 1.5 percentage points off second-quarter GDP growth, and economists have pointed out that this is a reminder that an AI boom does not automatically translate into increased US economic activity.

The Federal Reserve's preferred measure of inflation, the PCE price index, rose 3.7% last month from June 2025, but was down from a 4.1% year-over-year increase in May. Core consumer prices remained steady at 3.3%, with a slight dip in energy prices contributing to this trend.