US Economy Expands 1.5% in Second Quarter as Growth Slows

By Mintesinot Nigussie  |  August 27, 2026

The US economy grew at an annual rate of 1.5 percent in the second quarter of 2026, slowing from 2.1 percent in the first quarter as government spending fell and growth in investment and exports weakened.

The second estimate from the US Bureau of Economic Analysis was unchanged from its initial estimate, with stronger consumer spending partly offset by an upward revision to imports.

Consumer spending, exports and investment contributed to growth during the April-June quarter, while government spending declined. Imports increased, subtracting from the overall GDP calculation.

A measure of underlying domestic demand remained stronger than headline growth. Real final sales to private domestic purchasers, which combines consumer spending and gross private fixed investment, increased 4.2 percent, an upward revision of 0.3 percentage point from the previous estimate.

Price pressures remained elevated. The price index for gross domestic purchases increased 5.8 percent during the quarter, while the personal consumption expenditures price index rose 5.3 percent. The core PCE price index, which excludes food and energy, increased 3.6 percent.

Real gross domestic income, an alternative measure of economic activity, increased 2.2 percent in the second quarter, accelerating from 1.2 percent in the first quarter. The average of real GDP and real GDI rose 1.8 percent, compared with 1.7 percent in the previous quarter.

Corporate profitability also strengthened sharply. Profits from current production increased by 400.9 billion US dollars in the second quarter, compared with a 74.4 billion US dollar increase in the first quarter, according to the BEA.

The latest figures show an economy still expanding but with growth moderating from the start of the year, while domestic demand and corporate profits remained comparatively strong.

Source: FSX Business News