US economy slows to 1.5% growth in Q2 despite robust consumer spending

The slowdown in America's economic output marked a significant deceleration from the first quarter's pace, according to data released by the Commerce Department on Wednesday. The second-quarter growth figure was unchanged from the department's preliminary estimate, indicating little revision to initial assessments of the economy's performance.

Consumer spending, which underpins roughly 70 per cent of US economic activity, provided resilience during the period. Household consumption accelerated to a 3.4 per cent annual growth rate in the April-June quarter, a sharp rebound from the modest 0.5 per cent pace recorded in the January-March period. The strength in consumer demand reflected continued household purchasing despite concerns about the broader economic outlook.

The subdued overall growth figure was largely attributable to a surge in imports, which are subtracted from GDP calculations since the metric is designed to measure only domestic production. Imports expanded at a 12.5 per cent annual rate, partly driven by increased shipments of computer chips and other technology products linked to artificial intelligence investments. This import surge trimmed 1.64 percentage points from the second-quarter growth figure, underscoring how trade dynamics significantly influenced the headline economic number.