The U.S. economy grew at a sluggish 1.5% annual pace from April through June, according to a Commerce Department report released Wednesday. The figure was unchanged from the department's first estimate and marked a deceleration from the 2.1% pace recorded in the first quarter.
Despite the modest headline number, consumer spending remained healthy. Spending, which accounts for about 70% of U.S. economic activity, rose at a 3.4% annual rate in the second quarter, up from just 0.5% in the January–March period.
The lackluster growth figure was largely attributed to imports, which are subtracted from GDP because the measure is designed to count only domestic production. Imports climbed at a 12.5% annual pace during the quarter, shaving 1.64 percentage points off growth. The surge was partly driven by shipments of computer chips and other products supporting artificial intelligence investment.
Business investment also picked up, reflecting the AI boom. Excluding housing, business investment rose at an 8.5% annual rate in the second quarter. A broader measure of underlying strength—stripping out government spending and trade—grew at a solid 4.2% pace, up from 1.7% in the first quarter.
Meanwhile, housing investment ticked up for the first time since the end of 2024, though the housing market has been depressed by high mortgage rates.
The U.S. economy has shown surprising resilience in the face of fighting with Iran and the related spike in energy prices, according to the report.
Wednesday's release was the second of three Commerce Department estimates for second-quarter GDP. The third and final report is due Sept. 30.