US Economy Stumbles to 1.5% Growth Amid Inflation Concerns
The US economy expanded at a sluggish 1.5% annual rate between April and June, weighed down by rising imports, despite consumer spending showing surprising resilience.
Consumer spending, which drives approximately 70% of US economic activity, surged at a 3.2% annual pace, a significant increase from the 0.5% recorded in the January-March period.
The Commerce Department also revealed that its personal consumption expenditures (PCE) price index, the Federal Reserve's favored inflation measure, rose 3.7% last month from June 2025, above the 2% target. This marked a decrease from the 4.1% year-over-year increase observed in May.
Olu Sonola, head of US economics at Fitch Ratings, commented: 'The consumer rescued the quarter. AI investment remains a powerful growth story, but the import surge underpinning the buildout is a reminder that an AI boom does not automatically translate into an equally large boost to U.S. GDP.'