Key facts
- US economic growth slowed to an annual 1.5% pace in Q2.
- This growth rate missed economists' forecasts of 2.1%.
- Consumer spending accelerated to a 3.2% rate in Q2.
- Investment in fixed assets grew at a 7% annual rate, with equipment spending up 15.2%.
- Increased imports and slower government spending acted as drags on growth.
US economic growth slowed to an annual 1.5% pace in the second quarter, falling short of economists' expectations of 2.1%. The deceleration was attributed to slower government spending and a significant increase in imports, which offset stronger consumer spending and business investment. Consumer spending accelerated to a 3.2% rate, potentially boosted by tax refunds, while investment in fixed assets, including equipment driven by the AI industry, also showed robust growth. However, the rise in imports accounted for a 1.5 percentage point drag on GDP growth. Pantheon Macroeconomics noted that while private demand was solid, the strength may not be sustained due to fading tax refund boosts and weak underlying income growth.