The U.S. economy grew at an annualized rate of 1.5% in the second quarter of 2026, according to the Bureau of Economic Analysis, slowing from 2.1% growth in the first quarter and coming in below what economists had forecast.
The Reuters poll of economists had placed the consensus forecast at 2.1% for the second quarter, according to CBS News
The deceleration reflected pressure from the ongoing conflict with Iran, which disrupted shipping through the Strait of Hormuz and pushed global energy costs higher. At the pump, Americans saw prices jump from a pre-war average of $2.98 a gallon to well above $4 over the course of the second quarter. Household spending, the largest single driver of U.S. output at around two-thirds of the total, accelerated to a 3.2% annualized clip after barely registering at 0.5% in the first quarter.
Fixed investment by businesses expanded at an 8.4% annualized rate, with outlays on equipment and intellectual property reflecting heavy corporate commitment to artificial intelligence buildout, according to the Boston Globe. Real final sales to private domestic purchasers — a gauge of core demand that excludes the distortions of trade flows and inventory changes — came in at a 3.9% annualized rate, more than doubling its 1.7% reading from the January-March period. A sharp 11.5% increase in imports — driven in part by heavy purchases of semiconductors and other goods feeding the AI buildout — cut 1.5 percentage points from the quarter’s headline GDP reading, according to the Boston Globe.