Second-quarter GDP rose at a slower-than-expected 1.5% annualized rate as trade weighed, but consumer spending and AI-driven investment accelerated.
US gross domestic product expanded at a 1.5% annualized pace in the second quarter, down from 2.1% in Q1, as a wider trade deficit offset gains in domestic demand. The print fell short of economists’ median forecast of 2.1%, with some analysts trimming estimates after June trade and inventory data signaled weaker momentum.
Consumer spending surged at a 3.2% rate, rebounding sharply from a 0.5% gain in the prior quarter, while business investment in AI-related equipment remained robust. The resilience in demand came despite higher gasoline prices linked to Middle East tensions, supported by larger tax refunds and stronger household balance sheets.
The report underscores a cooling but still-solid economy, with underlying strength in private demand contrasting with external headwinds. Markets are watching for signs of whether the slowdown will prompt a shift in Federal Reserve policy.