US GDP growth slows to 1.5% in second quarter
The US economy grew at an annualized rate of 1.5% in the second quarter, down from previous quarters, indicating a slowdown in economic activity.
The Full Story
A plain summary built from the channels that reported this story.
The US economy grew at an annualised rate of 1.5% in the second quarter of 2026, according to new data from the Commerce Department. The figure marks a sharp slowdown from the 2.1% growth recorded in the first quarter and came in below economists' expectations.
Despite the headline slowdown, underlying data painted a more resilient picture. Consumer spending remained strong across both goods and services, and business investment held up, driven largely by the artificial intelligence boom. Major technology companies such as Meta and Microsoft are building out data centres, while investment in transportation and industrial equipment also continued to support growth.
However, several factors weighed on the economy. Energy prices stayed high, and trade data was distorted by businesses adjusting the timing of imports and exports in response to ongoing uncertainty over tariffs. The Supreme Court recently struck down some tariffs, but the Trump administration has continued to push for new trade barriers. The conflict in the Middle East also added pressure: after a relatively calm June, fighting escalated in July, pushing petrol prices above $6 a gallon and hitting consumer sentiment.
Inflation data for June showed little change, but the outlook remains uncertain. The AI boom, while boosting GDP, has also raised concerns about rising energy costs and the risk of overheating in certain sectors. At the Federal Reserve's latest meeting, three members voted to raise interest rates, while nine backed Chair Kevin Walsh. Investors remain sceptical that the Fed has inflation under control, and the prospect of rate cuts this year looks unlikely despite pressure from the White House.
On screen
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Key Claims
Claims reported during this story's coverage, mapped by channel. Ordered by how many channels carried each claim.
| Claim | BBC News |
|---|---|
| Consumer spending and business investment remained strong, with the AI boom fuelling investment by companies like Meta and Microsoft. | |
| Gas prices rose above $6 a gallon in July due to escalating conflict in the Middle East. | |
| US GDP grew at an annualised rate of 1.5% in the second quarter of 2026, down from 2.1% in the first quarter. |
Channel Perspectives
What each channel focused on, with key quotes.
BBC News focused on expert analysis from a Bloomberg journalist, providing a balanced view that acknowledged the headline slowdown but emphasised underlying resilience. The report gave detailed attention to the interplay of factors such as AI investment, tariff uncertainty, and Middle East tensions, and ended with a forward-looking question about Federal Reserve policy.
- “this 1.5% growth GDP expansion is lower than expected, but there's a bunch of different data points underlying that that suggests that the economy is more resilient than that top line number would suggest.”
- “Part of this is energy prices continue to be high. You also have a lot of different noise in the data, particularly around trade and tariffs and imports and exports, because there's a lot of businesses who are playing some games with the timing of when they're importing things and exporting things, because the tariff landscape continues to be uncertain.”
- “Investors are not at all convinced that he has a grasp on inflation, and we saw three people yesterday at the Fed meeting vote to increase interest rates, but nine stuck with the chair.”
Broadcast Timeline
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