Consumer spending accelerated to 3.4% annual rate, up from 0.5% in Q1
The U.S. economy grew at a 1.5% annual pace from April through June, the Commerce Department reported Wednesday, decelerating from a 2.1% pace from January through March. The second-quarter reading on gross domestic product was unchanged from the department’s initial estimate.
The weak top-line number masked a sharp rebound in consumer spending, which rose at a 3.4% annual clip after a tepid 0.5% pace from January through March. Consumer spending accounts for about 70% of U.S. economic activity, according to the Commerce Department.
The drag on headline growth came from imports, which are subtracted from GDP because the measure is designed to capture only domestic U.S. production. Imports rose at a 12.5% annual pace during the quarter, partly driven by a surge in shipments of computer chips and other products that support artificial-intelligence investment. That import surge sliced 1.64 percentage points off second-quarter growth, the department reported.