US Economy Stalls at 1.5% Growth Rate in Q2 Amid Ongoing Inflation Concerns

The US economy grew at a sluggish 1.5% pace in the second quarter of this year, down from 2.1% in the previous quarter. Consumer spending increased by 3.2%, which is more than double the growth rate in the first three months of the year.

Business investment also saw an increase, with a rise of 8.4% excluding housing. However, imports weighed heavily on growth, shaving off 1.5 percentage points from the overall GDP expansion. The surge in AI investment and related imports contributed to this slowdown.

The Federal Reserve's preferred measure of inflation rose by 3.7% last month, but at a slower pace than in previous months. Core consumer prices remained above the central bank's 2% target for more than five years, leading some Fed officials to express concern and frustration with progress against inflation.