US GDP Growth Slows to 1.5% in Q2 Amid Strong Core Demand

The US economy reported a slower than expected growth rate of 1.5% in Q2 2026, but beneath the surface, core domestic demand metrics showed strong underlying momentum.

Real final sales to domestic purchasers surged to an annualized 3.9%, a new cyclical high, while private consumption rebounded sharply to 3.2%

The core PCE price index eased to 3.3% year-over-year in June, and market expectations for further Fed rate hikes cooled significantly, triggering a sharp drop in the US Dollar Index.

Despite the economic resilience, interest rates continue to weigh on the housing market, with existing home sales at historical lows and nominal mortgage rates above 6.5%