US Economy Stalls with Slow 1.5% Growth Rate in Second Quarter

The US economy grew at a sluggish 1.5% pace in the second quarter of this year, according to new data from the Commerce Department. This represents a deceleration from the 2.1% growth rate seen in the first three months of 2026.

Consumer spending, which accounts for about 70% of US economic activity, increased at a 3.2% annual clip, up from 0.5% in the January-March period. Business investment, excluding housing, rose at an 8.4% pace, down from 10.6% from January through March but still strong.

The economy's underlying strength looked good, expanding at a 3.9% annual pace, up from 1.7% from January through March. However, imports weighed on growth, rising at an 11.5% pace and shaving 1.5 percentage points off second-quarter GDP growth.

The Federal Reserve's favored measure of inflation grew more slowly last month but remained above the central bank's 2% target for the fifth straight year. The PCE price index rose 3.7% last month from June 2025, down from a 4.1% year-over-year increase in May.