US economy grows sluggish 1.5% in second quarter as inflation tops Fed target

Consumer spending remained resilient even as policymakers kept interest rates on hold

The US economy expanded at a sluggish 1.5% pace from April through June as rising imports weighed on growth. But consumer spending rose. And the Federal Reserve’s favored measure of inflation grew more slowly last month, but remained above the central bank’s 2% target.

The commerce department reported on Thursday that growth in US gross domestic product (GDP) – the nation’s output of goods and services – decelerated from 2.1% in the first three months of 2026 and came in below economists’ expectations.