The US economy experienced a 1.5% growth rate from April through June, according to a report from the commerce department on Thursday. This figure represents a deceleration from the 2.1% growth recorded in the first three months of 2026 and fell below economists' expectations.
Rising imports were noted as a factor weighing on growth, although consumer spending increased during the period. The Federal Reserve's favoured measure of inflation, the personal consumption expenditures (PCE) price index, increased by 3.7% in June compared to June 2025. This was a decrease from a 4.1% year-over-year rise in May, but still remained above the central bank's 2% target.
Excluding volatile food and energy prices, core consumer prices were up 3.3% from a year earlier, a slight change from the 3.4% increase seen in May. The Federal Reserve opted to keep its benchmark interest rate unchanged for the fifth consecutive meeting on Wednesday, despite three regional Fed presidents reportedly dissenting in favour of raising rates to address elevated inflation.