WASHINGTON (AP) \u2014 The U.S. economy grew at a sluggish 1.5% pace from April through June. But consumer spending stayed strong.<\/p>\n
Growth in gross domestic product \u2014 the nation’s output of a goods and services \u2014 decelerated from a 2.1% pace from January through March, the Commerce Department reported Wednesday. The second-quarter growth number was unchanged from the department’s first estimate.<\/p>\n
Still, consumer spending \u2014 which accounts for about 70% of U.S. economic activity \u2014 increased at a healthy 3.4% annual clip, up from 0.5% in the January-March period.<\/p>\n
The reason for the lackluster growth was imports. They are subtracted from growth because GDP is only supposed to count domestic production. Imports rose at a 12.5% annual pace from April through June, partly due to a surge in shipments of computer chips and other products that support artificial intelligence investment, and sliced 1.64 percentage points off second-quarter growth.<\/p>\n
WATCH: Breaking down the GDP report as U.S. economy slows in 2nd quarter<\/a><\/p>\n Beyond the headline figures, the U.S. economy has proven surprisingly resilient in the face of fighting with Iran and the spike in energy prices it caused. Business investment, excluding housing, rose at a 8.5% pace in the second quarter, reflecting the AI investment boom. And a measure of the economy’s underlying strength \u2014 which strips out volatile government spending and trade numbers \u2014 grew at a strong 4.2% rate, up from 1.7% in the first quarter.<\/p>\n Investment in housing rose, ticking up for the first time since the end of 2024. The housing market has been depressed by high mortgage rates.<\/p>\n READ MORE: The new housing bill is historic. Experts say it may fall short for renters most in need<\/a><\/p>\n Wednesday’s report was the second of three Commerce Department looks at second-quarter GDP growth. The third and final report is due Sept. 30.<\/p>\n Also on Wednesday, the U.S. reported that an inflation measure closely watched by the Federal Reserve was unchanged last month in the latest sign that many Americans are still struggling with higher costs.<\/p>\n