US GDP Expands 1.5% in Q2 Amid Persistent Inflation Woes
WHO:
AP News - Olu Sonola, head of U.S. economics at Fitch Ratings, commented on the economic situation.
AP News - President Trump’s Republicans are facing midterm elections.
WHAT:
AP News - A measure of the economy’s underlying strength, which strips out volatile government spending and trade numbers, expanded at a 3.9% annual pace, up from 1.7% from January through March.
AP News - Business investment in equipment rose by more than 15% in the second quarter.
Al Jazeera - The trade deficit in May grew to $77.6 billion, a 42% increase from the month before.
Al Jazeera - Exports tumbled by 3.2% to $317.7 billion, while imports rose by 3.3% to $395.3 billion.
Al Jazeera - During the second quarter, US petrol prices hit $4.48 per gallon in May and retreated to $3.96 per gallon by the end of June.
Al Jazeera - Discretionary spending surged in June, with total card spending excluding gas increasing by 5.6% year over year, marking the strongest growth since April 2022.
AP News - The U.S. economy expanded at a 1.5% pace in the second quarter.
AP News - Consumer spending increased at a 3.2% annual rate, up from 0.5% in the previous quarter.
AP News - Business investment, excluding housing, rose at an 8.4% pace.
AP News - Imports rose at an 11.5% pace, which negatively impacted GDP growth by 1.5 percentage points.
AP News - The personal consumption expenditures (PCE) price index rose 3.7% from the previous year.
AP News - Core consumer prices increased by 3.3% from a year earlier.
AP News - Employers added an average of 92,000 jobs per month this year.
WHERE:
AP News - The economic data was reported in Washington, D.C.
AP News - Gas prices were displayed at a Sinclair gas station along Interstate 70 in Golden, Colorado.
WHEN:
AP News - The second quarter of 2026 is referenced for the GDP growth.
AP News - The midterm elections are less than 100 days away from the time of reporting.
AP News - The PCE price index data is from June 2026.
WHY:
Al Jazeera - A widening trade deficit and a jump in petrol prices are key reasons for the slowing GDP growth.
AP News - Rising imports weighed on economic growth.
AP News - The increase in consumer spending was attributed to a resilient job market.
HOW:
Al Jazeera - The combination of tariffs and oil price spikes is described as a "classic supply shock" affecting the economy.
AP News - The GDP growth figure was calculated by the Commerce Department, which reported a deceleration from 2.1% in the first quarter of 2026.
(UPDATED July 31, 2026 06:05 UTC)
The economy's underlying strength has shown significant improvement, expanding at a 3.9% annual pace, a notable increase from 1.7% earlier this year, while business investment in equipment surged by more than 15% in the second quarter. However, the trade deficit grew to $77.6 billion in May, a 42% rise from the previous month, as exports fell by 3.2% and imports increased by 3.3%. Analysts attribute the slowing GDP growth to a combination of rising petrol prices, which hit $4.48 per gallon in May before dropping to $3.96 by the end of June, and a widening trade deficit, describing the situation as a "classic supply shock."
--
(UPDATED July 30, 2026 22:28 UTC)
The U.S. economy expanded at a pace of 1.5% in the second quarter, according to the Commerce Department, which noted a slowdown from 2.1% in the first quarter. Consumer spending saw a significant increase at an annual rate of 3.2%, while business investment, excluding housing, rose by 8.4%, although rising imports negatively impacted GDP growth by 1.5 percentage points. With midterm elections approaching in less than 100 days, President Trump’s Republicans are facing a challenging economic landscape, highlighted by a 3.7% rise in the personal consumption expenditures price index from the previous year.