US Economic Growth Slows to 1.5%, Consumer Spending Surges

The United States experienced a sluggish economic growth of 1.5% between April and June, a noticeable deceleration from the 2.1% expansion recorded in the first quarter. This slowdown, detailed by the U.S. Department of Commerce, highlights a cooling trend in the nation's economic output.

Despite the overall slowdown in GDP, consumer spending, which constitutes 70% of the U.S. economy, demonstrated robust growth. Spending increased by a significant 3.4% in the second quarter, a substantial jump from the modest 0.5% rise in the preceding period. This surge in consumption suggests underlying resilience in household demand.

However, inflationary pressures persist, with the annual inflation rate holding steady at 3.7% in July, mirroring June's figures. This level is considerably higher than the Federal Reserve's 2% target. Rising costs for essential goods like gasoline and groceries are expected to become a central issue in the upcoming November elections, especially as global conflicts contribute to higher fuel prices. Additionally, President Donald Trump's threats of increased tariffs on Canada and China, coupled with the costs of financing AI infrastructure, are pushing up prices for electronics.