U.S. GDP Growth Slows to 1.5% in Second Quarter
The U.S. economy grew at a slower-than-expected rate of 1.5% in the second quarter, according to initial data from the Bureau of Economic Analysis (BEA). This figure fell short of forecasts that had predicted growth closer to 2%. Consumer spending and business investment contributed positively but were partially offset by reduced government outlays. Business investment remained a strong driver due to continued capital expenditures on artificial intelligence infrastructure. Nonresidential fixed investment rose at an impressive rate, with significant gains in industrial equipment and transportation sectors. However, net exports subtracted from GDP growth as imports increased sharply amid anticipation of new tariffs. Despite these challenges, final sales to private domestic purchasers showed robust underlying demand. The Federal Reserve's preferred inflation measure—the PCE price index—slowed slightly last month while core prices rose less than expected. The data suggest the economy is resilient despite ongoing geopolitical tensions and rising costs.
Topics: AI Growth Business Investment Consumer Spending US Economy