US economy grows sluggish 1.5% in Q2 as inflation stays above Fed target

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Consumer spending remained resilient even as policymakers kept interest rates on hold

The US economy expanded at a sluggish 1.5% pace from April through June as rising imports weighed on growth. But consumer spending rose. And the Federal Reserve ’s favored measure of inflation grew more slowly last month despite remaining above the central bank’s 2% target.

The commerce department reported on Thursday that growth in US gross domestic product (GDP) – the nation’s output of goods and services – decelerated from 2.1% in the first three months of 2026 and came in below economists’ expectations.

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