U.S. economy turns in sluggish 1.5% second-quarter growth and inflation remains above Fed target

Washington DC, July 30, 2026 — The U.S. economy expanded at a sluggish 1.5% pace from April through June as rising imports weighed on growth. And the Federal Reserve’s favored measure of inflation grew more slowly last month, but remained above the central bank’s 2% target. But three regional Fed presidents dissented, saying they wanted to raise rates to combat elevated inflation. Still, Americans remain frustrated over the high cost of living as inflation remains stubbornly stuck above the Federal Reserve’s 2% target. Thursday’s GDP report was the first of three Commerce Department estimates of second-quarter economic growth.