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US Q2 GDP growth slows to 1.5% amid weaker government and trade
The report also showed real final sales to private domestic purchasers accelerating to 3.9%, while core PCE inflation eased to 3.4%.
The US economy expanded at an annualized 1.5% rate in the second quarter, according to the advance estimate from the Bureau of Economic Analysis, down from 2.1% in the first quarter and below the 2.3% pace expected by markets, as reported by Action Forex.
The GDP slowdown was driven by a downturn in government spending, slower investment and export growth, and a larger increase in imports that weighed on the overall figure. Consumer spending remained the main pillar of growth, accelerating from the prior quarter.
Beneath the headline number, domestic demand looked stronger, with real final sales to private domestic purchasers rising to 3.9% from 1.7% in the first quarter, a measure often viewed as a better gauge of underlying momentum.
On inflation, the gross domestic purchases price index accelerated to 5.7% and the headline PCE price index rose to 5.1%, reflecting higher energy prices. At the same time, core PCE inflation eased from 4.4% to 3.4%, suggesting moderation in price pressures outside food and energy.