U.S. Economy Grew a Slower-Than-Expected 1.5% in the Second Quarter

The U.S. economy grew at a slower pace than expected in the second quarter, expanding at an annual rate of 1.5%, according to the advance estimate released by the Bureau of Economic Analysis. The reading came in below many economists' forecasts and marked a step down from the first quarter's 2.1% pace.

The government said growth was driven by increases in consumer spending, investment, and exports, partly offset by a decline in government spending. Imports, which are subtracted in the GDP calculation, rose during the quarter, weighing on the headline figure.

A cooler, steadier picture

The slowdown fits a broader narrative of an economy downshifting from the rapid growth of recent years toward a more moderate pace. A softer but still-positive reading can be consistent with a soft landing, in which growth cools without tipping into contraction — though the below-forecast number gave some analysts pause.

What it means

The advance estimate is the first of three readings and will be revised as more complete data arrive, so the initial figure should be treated as a snapshot rather than a final verdict. Still, it offers an early gauge of momentum heading into the second half of the year.

The report lands amid an active stretch for the economy, with the Federal Reserve weighing its next moves and fresh labor-market data on the way. Consumers, whose spending remains the economy's main engine, will be central to whether growth stabilizes or slows further in the months ahead.