US economy grows at a sluggish 1.5% in second-quarter with inflation remaining stubbornly high

WASHINGTON (AP) — The U.S. economy expanded at a sluggish 1.5% pace from April through June as rising imports weighed on growth, yet consumers continued to spend. And the Federal Reserve’s favored measure of inflation grew more slowly last month. But it remained above the central bank’s 2% target at a time when Americans are frustrated about the high cost of living ahead of the midterm elections, now less than 100 days away.

Growth in U.S. gross domestic product — the nation’s output of goods and services — decelerated from 2.1% in the first three months of 2026, the Commerce Department reported Thursday, coming in below economists' expectations. But consumer spending — which accounts for about 70% of U.S. economic activity — increased at a 3.2% annual clip, up from 0.5% in the January-March period.