US GDP slows to 1.5% as imports surge

The U.S. economy grew at a sluggish 1.5% annual rate from April through June, down from 2.1% in the first quarter and below expectations, the Commerce Department reported. Consumer spending, which accounts for about 70% of economic activity, rose at a 3.2% pace, up sharply from 0.5% in Q1. However, a surge in imports—partly for AI-related computer chips—shaved 1.5 percentage points off GDP. Inflation, as measured by the Fed's preferred PCE index, rose 3.7% year-over-year, still above the 2% target. The Fed held interest rates steady, with three regional presidents dissenting.