U.S. GDP growth slows to 1.5% annual rate in second quarter
Second-quarter growth undershot expectations as rising imports and weaker government spending weighed on output, while private domestic demand strengthened and inflation pressures picked up.
U.S. economic growth slowed to a 1.5% annualized pace in the second quarter, below the revised 2.1% rate in the first quarter and short of economists’ 2.1% forecast, as rising imports and weaker government spending weighed on output. The advance estimate showed gains in consumer spending, investment and exports, partly offset by a decline in government spending, while imports increased at a faster pace than in the prior quarter. A key measure of underlying private-sector demand, real final sales to private domestic purchasers, accelerated to 3.9% from 1.7%. Inflation pressures strengthened during the quarter, with the gross domestic purchases price index rising 5.7% after 3.6%, the PCE price index increasing 5.1% after 4.6%, and core PCE inflation easing to 3.4% from 4.4%. Current-dollar GDP rose at a 7.9% annualized rate.
- real final sales to private domestic purchasers: A measure of underlying private-sector demand that excludes trade, inventories and government spending.
- PCE price index: An inflation measure tied to consumer spending that is closely watched by the Federal Reserve.
- annualized: A quarterly rate expressed as if the pace continued for a full year.