The US economy expanded at a 1.5% annual rate in the second quarter of 2026, falling short of the 2% forecast and decelerating from 2.1% in the first three months of the year.
Consumer spending proved resilient, rising 3.2% year-over-year, a sharp rebound from the 0.5% pace set in the first quarter. However, broader price gauges pointed to stubborn inflation. The GDP price index climbed 6.2% year-over-year, while the PCE price index eased to 3.7% in June, down from 4.1% a month earlier.
The data landed as the Federal Reserve held interest rates steady for a fifth consecutive meeting in July. Dissenting voices from three regional Fed presidents pushed for a rate hike — the first such dissent in a decade. Corporate investment, led by spending on AI equipment, remained a key driver of activity.