US economic growth slows in second quarter but domestic demand robust

Lead

The US economy grew at a slower pace in the second quarter, but a surge in consumer spending and robust business investment in AI-related equipment pointed to underlying strength, according to figures released by the Commerce Department's Bureau of Economic Analysis on Thursday. Gross domestic product increased at a 1.5 per cent annualised rate, marking a slowdown from the 2.1 per cent pace recorded in the first quarter of 2026.

Coverage comparison

Both Al Jazeera and the South China Morning Post reported the headline figure of 1.5 per cent annualised GDP growth for the April-to-June period, citing the Commerce Department's advance estimate. Al Jazeera noted that growth slowed amid a growing trade deficit and tensions between the US and Iran, which weighed on global fuel prices. The South China Morning Post similarly attributed the slowdown to a widening in the trade deficit, but also highlighted an acceleration in consumer spending and business investment in equipment related to the buildout of artificial intelligence infrastructure.

The two outlets offered somewhat different emphases. Al Jazeera's coverage framed the slowdown within the context of geopolitical tensions and fuel prices, while the South China Morning Post focused on the internal dynamics of the economy, noting that the slowdown was partly offset by strong consumer spending and business investment. Both reports referenced the first-quarter growth rate of 2.1 per cent.

Key claims

• GDP growth slowed to 1.5% annualised in Q2. Both Al Jazeera and the South China Morning Post reported the figure, citing the Commerce Department's Bureau of Economic Analysis. Al Jazeera noted that this followed a 2.1 per cent increase in the first quarter. The South China Morning Post added that economists polled by Reuters had forecast a 2.1 per cent pace, with estimates ranging from 0.8 per cent to 2.9 per cent. The survey was conducted before the release of June's advance economic indicators report, which showed a moderate contraction in the goods trade deficit and retail inventories unchanged, prompting some economists to cut their GDP estimates to as low as 1.5 per cent.

• Consumer spending surged at a 3.2 per cent rate in Q2. Both outlets reported this figure. Al Jazeera attributed the bump partly to generous tax refunds from US President Donald Trump's 'One Big Beautiful Bill Act' and to heightened petrol prices. The South China Morning Post noted that consumer spending, which accounts for more than two-thirds of US economic activity, surged after abruptly slowing to a 0.5 per cent growth pace in the January-March quarter.

• Bigger tax refunds cushioned consumers against higher petrol prices. This claim was carried by the South China Morning Post, which reported that larger tax refunds this year provided a cushion for consumers against higher petrol prices stemming from the Iran war.

• US-Iran tensions weighed on global fuel prices. Al Jazeera reported that tensions between the US and Iran weighed on global fuel prices and contributed to the slowdown. The outlet also noted that the average price for a gallon of petrol was $4.09, up from $3.84 a month earlier, according to the American Automobile Association (AAA).

• Nvidia is in talks to invest $250 million in OpenAI. Al Jazeera reported this on Monday, linking it to the AI spending boom that is heavily import-reliant and contributing to trade deficits.

• The Personal Consumption Expenditure Price Index increased 3.7 per cent annually in June. This figure, reported by Al Jazeera, indicates inflation remains elevated, though it was not a central focus of either outlet's coverage.