Economic growth slowed from the previous quarter, with the annualized rate reaching 1.5% amid weaker momentum.
U.S. gross domestic product (GDP) increased 0.4% in the second quarter of 2026 compared with the previous quarter of 2026, while the U.S. economy expanded at an annualized rate of 1.5%, slowing from 2.1% pace recorded in the previous period, according to data released Thursday by the Bureau of Economic Analysis (BEA) .
These results broadly matched analysts’ expectations for a moderation in growth, although the analyzed figure came in slightly below the 1.8% forecast, which had anticipated a stronger boost from from investment in technology and artificial intelligence.
The increase in GDP in the second quarter of the year reflects increases of 3.2% in consumer spending, 3% in investment, and 4.5% in exports.
“The key drivers of economic growth continue to gain momentum thanks to President Trump’s economic agenda: both consumer spending and investment growth far exceeded expectations in the second quarter,” White House spokesperson Kush Desai wrote on X.
Desai added, “despite possible discrepancies in inventory data, the second-quarter GDP report confirms that U.S. consumers remain resilient and that the long-term recovery of the U.S. industrial base is progressing steadily,” a development he also attributed to Donald Trump’s leadership.
Those gains were partially offset by a 0.8% decline in government spending, reversing the 4.4% increase recorded in the first quarter, according to the BEA report.
Imports, which are deducted from the GDP calculation, rose by 11.5%, three-tenths of a percentage point less than the previous figure.
Here, Desai clarifies that this increase “was due exclusively to record-high imports of capital goods—that is, the machinery and equipment that will drive future growth.”
Defense climbed rose by 2.4% during the quarter, up from 2.1% in the first three months of the year. On the other hand, total federal spending fell by 4.1%, in contrast to the 9.4% growth recorded in the first few months of 2026.
Meanwhile the Personal Consumption Expenditures (PCE) price index, an indicator similar to the GDP deflator, rose at an annualized 5.1% in the second quarter, while the core figure (which excludes food and energy) increased 3.4%.
GDP growth, inflation and labor market data were among the key indicators for the Federal Reserve (Fed) in its monetary policy decisions.
On Wednesday, the Fed kept interest rates remained unchanged at a range of 3.5% to 3.75% marking the second policy meeting chaired by Kevin Warsh as head of the central bank.
