U.S. economy grows slower than expected despite steady consumer spending

The U.S. gross domestic product grew at a 1.6 % annualized rate in the second quarter, a pace that fell short of the 2.1 % forecast released by the Bureau of Economic Analysis, marking a broader slowdown in economic activity. Despite the weaker headline figure, personal consumption expenditures rose 2.5 % on an annualized basis, indicating that households continued to spend at a robust level and that the deceleration was not driven by a drop in consumer demand.

Analysts attribute the slower growth to a combination of reduced business investment, a modest rise in inventory accumulation, and weaker net exports. Fixed‑investment spending slipped 0.9 % after a series of gains earlier in the year, while commercial inventories increased by 0.7 % as firms adjusted to supply‑chain disruptions. Exports declined 1.2 % and imports fell 0.5 %, further trimming the GDP total. The data suggest that the economy’s momentum is now hinging more on corporate spending and external trade dynamics than on household consumption, a pattern that will shape policy discussions and forecasts for the remainder of the year.