US Real GDP growth advance estimate slows to 1.5% in second quarter of 2026
Washington DC, July 30
United States' real gross domestic product slowed at an annual rate of 1.5 per cent in the second quarter of 2026, according to the advance estimate released by the US Bureau of Economic Analysis.
The figure marks a deceleration compared to the first quarter, when real GDP grew by 2.1 per cent.
When compared with the performance in the previous quarter, the slowdown in economic momentum reflected shifts across multiple segments of the economy.
"Compared to the first quarter, the deceleration in real GDP in the second quarter reflected a downturn in government spending and decelerations in investment and exports that were partly offset by an acceleration in consumer spending," the Bureau reported.
The agency added that, "Imports increased more in the second quarter than in the first quarter."
Despite the overall headline slowdown, private domestic demand showed strength during the three-month period. Real final sales to private domestic purchasers, which combines consumer spending and gross private fixed investment, rose 3.9 per cent in the second quarter. This represented a notable step up from the 1.7 per cent growth recorded in the first quarter.
According to the report, the change in economic activity during the second quarter was driven by growth across key private sectors.
"The contributors to the increase in real GDP in the second quarter were increases in consumer spending, investment, and exports that were partly offset by a decrease in government spending," the release stated.
It further noted, "Imports, which are a subtraction in the calculation of GDP, increased."
Meanwhile, the advanced estimates for the price index for gross domestic purchases increased 5.7 per cent in the second quarter, following a 3.6 per cent increase in the preceding quarter.
The personal consumption expenditures (PCE) price index rose 5.1 per cent, compared to a 4.6 per cent gain in the first quarter. However, core inflation measures reflected a slight easing. The PCE price index excluding volatile food and energy components increased 3.4 per cent, down from a 4.4 per cent rise in the first quarter.
The report also detailed current-dollar GDP growth, which reached 7.9 per cent for the second quarter, providing a comprehensive overview of economic conditions during the period.
— ANI
Reader Comments
As someone who follows both Indian and US markets, this slowdown isn't surprising. Government spending cuts and investment deceleration were expected after the Fed's aggressive tightening. But the core PCE easing to 3.4% is good news for inflation watchers. Hope it doesn't affect Indian IT exports too much.
Yaar, this is why we need to strengthen our own economy. US sneezes and the whole world catches a cold. But 5.7% inflation in GDP price index? That's rough for ordinary Americans. Feels like we're all in the same boat—high prices everywhere. 😅
The private sector resilience is encouraging, but the government spending cut is concerning. Infrastructure spending by US govt usually has multiplier effects. Let's see how this plays out in Q3. India should keep an eye on Fed rate decisions—they directly impact our FII flows.
Honestly, after 2.1% growth in Q1, 1.5% isn't a disaster. But the slowdown in government spending and exports is a red flag. India's GDP is projected higher—time for us to become more self-reliant and less dependent on Western demand. Make in India needs to accelerate! 🇮🇳
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