{"id":793585,"date":"2026-07-30T15:39:08","date_gmt":"2026-07-30T15:39:08","guid":{"rendered":"https:\/\/www.newsbeep.com\/us\/793585\/"},"modified":"2026-07-30T15:39:08","modified_gmt":"2026-07-30T15:39:08","slug":"us-economy-slows-yet-americans-still-spending-in-face-of-inflation","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us\/793585\/","title":{"rendered":"US economy slows, yet Americans still spending in face of inflation"},"content":{"rendered":"

WASHINGTON (AP) \u2014 The U.S. economy expanded at a sluggish 1.5% pace from April through June as rising imports<\/a> weighed on growth, yet consumers continued to spend<\/a>. And the Federal Reserve\u2019s favored measure of inflation grew more slowly last month. But it remained above the central bank\u2019s 2% target at a time when Americans are frustrated about the high cost of living ahead of the midterm elections, now less than 100 days away. <\/p>\n

Growth in U.S. gross domestic product \u2014 the nation\u2019s output of goods and services \u2014 decelerated from 2.1% in the first three months of 2026, the Commerce Department reported Thursday, coming in below economists\u2019 expectations. But consumer spending \u2014 which accounts for about 70% of U.S. economic activity \u2014 increased at a 3.2% annual clip, up from 0.5% in the January-March period.<\/p>\n

A measure of the economy\u2019s underlying strength \u2013 which strips out volatile government spending and trade numbers \u2013 looked good, expanding at a 3.9% annual pace, up from 1.7% from January through March.<\/p>\n

Business investment, excluding housing, rose at an 8.4% pace, down from 10.6% from January through March but strong, reflecting a surge in investment in artificial intelligence<\/a>. <\/p>\n

Imports are subtracted from the economic figures because GDP is only supposed to count what is produced in the United States. Imports rose at an 11.5% pace, partly on a surge in shipments of computer chips and other products that support AI investment. The imports shaved 1.5 percentage off second-quarter GDP growth.<\/p>\n

\u201cThe consumer rescued the quarter,\u2019’ said Olu Sonola, head of U.S. economics at Fitch Ratings. \u201cAI investment remains a powerful growth story, but the import surge underpinning the buildout is a reminder that an AI boom does not automatically translate into an equally large boost to U.S. GDP.\u201d<\/p>\n

The Commerce Department also said Thursday that its personal consumption expenditures (PCE) price index, the one favored by the Fed, rose 3.7% last month from June 2025 , down from a 4.1% year-over-year increase in May. Excluding volatile food and energy prices, so-called core consumer prices were up 3.3% from a year earlier, little-changed from 3.4% increase in May. Prices actually fell 0.1% from May to June on a 9.2% drop in the price of gasoline and other energy products.<\/p>\n

The PCE prices were about in line with economists\u2019 expectations. But the year-over-year increase in prices has been stuck above the Fed\u2019s 2% target for more than five years, and some Fed officials are getting impatient with progress against inflation.<\/p>\n

The Fed on Wednesday chose to leave its benchmark interest rate unchanged for the fifth straight meeting. But three regional Fed presidents dissented, saying they wanted to raise rates to combat elevated inflation. <\/p>\n

<\/p>\n

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The American economy has been surprisingly resilient in the face of the Iran war and the spike in energy prices<\/a> it caused. The job market has bounced back this year from a lackluster 2025, giving consumers the wherewithal to spend. Employers are adding an average 92,000 jobs a month this year, compared with fewer than 10,000 a month in 2025 when high interest rates and President Donald Trump\u2019s erratic use of tariffs discouraged businesses from hiring.<\/p>\n

Higher costs have frustrated Americans ahead of November\u2019s midterm elections<\/a>, which will determine whether President Donald Trump\u2019s Republicans keep full control of Congress<\/p>\n

A new AP-NORC poll found that the public is souring on the Iran war<\/a>. And about 7 in 10 U.S. adults \u2014 72% \u2014 say it\u2019s \u201cextremely\u201d or \u201cvery\u201d important for the U.S. to prevent domestic oil and gas prices from rising, up from 67% in March.<\/p>\n","protected":false},"excerpt":{"rendered":"WASHINGTON (AP) \u2014 The U.S. economy expanded at a sluggish 1.5% pace from April through June as rising…\n","protected":false},"author":2,"featured_media":793586,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[27],"tags":[28,12,8876,109,101,8877,793,2402,801,228242,10066,795],"class_list":["post-793585","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-business","tag-donald-trump","tag-economic-indicators","tag-economic-policy","tag-economy","tag-federal-reserve-system","tag-general-news","tag-inflation","tag-iran","tag-iran-war","tag-u-s-department-of-commerce","tag-u-s-news"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/793585","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=793585"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/793585\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/793586"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=793585"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=793585"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=793585"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}