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US GDP slows to 1.5% in Q2 as imports weigh on growth

Personal consumption expenditures inflation eased to 3.7% year over year in July, but remained above the Fed’s 2% target.

Reported · Written up by our desk · Economy

The US economy expanded at a sluggish 1.5% pace in the second quarter, with rising imports weighing on overall growth, according to data from the Commerce Department reported by The Guardian Economics.

The report also showed consumer spending rose, even as the GDP outlook weakened. It said the Fed’s preferred inflation gauge, the personal consumption expenditures price index, rose 3.7% year over year in July, down from 4.1% in May.

Core prices excluding volatile food and energy increased 3.3% year over year, roughly flat versus 3.4% in May. The figures pointed to a shift in how the Middle East conflict has been affecting the economy through higher energy prices and inflation.

In parallel, the article said the Fed left its benchmark rate unchanged for a fifth straight meeting, while three regional Fed presidents dissented and called for higher rates to address inflation that has stayed too high for years. It noted that recent energy price swings tied to developments around US and Iran also feed into the inflation backdrop.

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