US GDP grows 1.5% in Q2, core inflation hits 3.3%

The U.S. economy grew at an annual rate of 1.5% in the second quarter of 2026, missing economist forecasts, the Commerce Department reported on July 30. The increase, adjusted for seasonality and inflation, was below the 1.8% consensus estimate from a Dow Jones survey and marked a slowdown from the first quarter’s 2.1% pace, according to Bureau of Labor Statistics data.

A separate report showed that the personal consumption expenditures price index fell 0.1% in June 2026. The annual inflation rate remained at 3.7%, matching forecasts but still well above the Federal Reserve’s goal.

Core PCE, which excludes food and energy, rose 0.1% on the month and 3.3% from a year earlier. The annual figure matched the estimate, but the monthly increase was below the 0.2% expectation.

While the headline PCE index is the central bank’s official policy gauge, most Fed officials consider core inflation a better indicator of longer-run trends.