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US GDP growth cools to 1.5% in second quarter as trade deficit widens
The Commerce Department said consumer spending rose 3.2% annualized, helping offset a weaker contribution from the goods trade deficit.
US economic growth slowed in the second quarter, with the Commerce Department’s Bureau of Economic Analysis reporting GDP increased at a 1.5% annualized rate in its advance estimate. Reuters had forecast growth of 2.1%, with estimates spanning from 0.8% to 2.9%.
The report comes as the widening in the trade deficit weighed on overall growth, though some analysts adjusted their outlook after later data pointed to a moderate contraction in the goods trade deficit and retail inventories staying unchanged. The first quarter growth rate was 2.1%.
Consumer spending, which accounts for more than two-thirds of US economic activity, accelerated to a 3.2% annualized rate after slowing to 0.5% in the January to March period. The outlet also noted spending has remained resilient despite the Middle East conflict, supported in part by larger tax refunds this year that helped cushion consumers from higher petrol prices tied to the war.