{"id":3409,"date":"2026-07-30T13:40:57","date_gmt":"2026-07-30T13:40:57","guid":{"rendered":"https:\/\/trustedmovinggroups.com\/?p=3409"},"modified":"2026-07-30T13:40:57","modified_gmt":"2026-07-30T13:40:57","slug":"u-s-economic-growth-slowed-unexpectedly-in-the-second-quarter-as-tariffs-and-iran-war-cut-into-gains","status":"publish","type":"post","link":"https:\/\/trustedmovinggroups.com\/?p=3409","title":{"rendered":"U.S. economic growth slowed unexpectedly in the second quarter, as tariffs and Iran war cut into gains"},"content":{"rendered":"
\n

U.S. \u200beconomic growth slowed in the second quarter amid a widening in the trade deficit, but an acceleration \u200cin consumer spending and robust business investment in equipment related to the buildout of artificial intelligence infrastructure pointed to underlying strength.<\/p>\n

Read more Trump\u2019s Iran war frustration and on the frontline of France\u2019s wildfire: Morning Rundown<\/a><\/p>\n

Gross domestic product increased at a 1.5% annualized rate last quarter, the Commerce Department\u2019s Bureau of Economic Analysis said in its advance estimate of second-quarter GDP on Thursday. Economists polled \u200bby Reuters had forecast GDP rising at a 2.1% pace. Estimates ranged from a 0.8% rate to a \u200b2.9% pace.<\/p>\n

<\/div>\n

The survey was, however, conducted before the release of June\u2019s advance economic indicators report, which showed \u2060a moderate contraction in the goods trade deficit and retail inventories unchanged. That data prompted some economists to cut their \u200bGDP estimates by as much as 0.8 percentage point to as low as a 1.5% rate. The economy grew at a \u200b2.1% pace in the first quarter.<\/p>\n

Consumer spending, which accounts for more than two-thirds of U.S. economic activity, surged at a 3.2% rate last quarter after abruptly slowing to a 0.5% growth pace in the January-March quarter. Despite the Middle East conflict, spending has remained resilient, in part thanks to \u200bbigger tax refunds this year, which provided a cushion for consumers against higher gasoline prices stemming from the war.<\/p>\n

In addition \u200bto generous tax refunds from President Donald Trump\u2019s \u201cOne Big Beautiful Bill,\u201d higher-income households who are benefiting from strong growth in asset prices are \u200calso driving \u2060spending. The recently ended FIFA World Cup tournament also likely helped to spur spending as did midterm election-related spending by nonprofits.<\/p>\n

The AI investment boom, which is showing no signs of slowing despite investor concerns that valuations of many technology companies have become stretched, is also helping to prop up domestic demand. But economists warned that the U.S.-led war with Iran, now in its sixth \u200bmonth, posed a downside risk \u200bto demand and ultimately economic \u2060growth in the second half of the year.<\/p>\n

Read more Father of boy rescued from pounding California surf says he is beyond grateful to teen lifeguard<\/a><\/p>\n

<\/div>\n

The Federal Reserve on Wednesday left its benchmark overnight interest rate in a 3.50%-3.75% range. Three members of the U.S. central bank\u2019s policy-setting committee dissented. \u200bThey \u201cpreferred\u201d a quarter-percentage-point hike.<\/p>\n

The Fed described economic activity as \u201cexpanding at a solid pace despite elevated \u200buncertainty that owes, \u2060in part, to the conflict in the Middle East.\u201d Economists expected the Fed to raise interest rates as soon as September to quell inflation, which also factored into their expectations for slower economic growth in the second half.<\/p>\n

Average gasoline prices have risen back above $4 \u2060a gallon \u200bamid renewed hostilities in the Middle East. With wages barely keeping up with \u200binflation, households have been tapping savings and saving less to maintain spending, a situation that economists said could not continue indefinitely.<\/p>\n

Some expected households to start focusing \u200bon savings as a precaution in light of the economic uncertainty.<\/p>\n

Read more Iran vows to \u2018punish the aggressor today\u2019 after U.S. unleashes \u2018heavy wave\u2019 of strikes<\/a><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

U.S. \u200beconomic growth slowed in the second quarter as the trade deficit widened, but consumer spending growth points to underlying strength.<\/p>\n","protected":false},"author":1,"featured_media":3408,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[21],"tags":[],"class_list":["post-3409","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-economy"],"yoast_head":"\nU.S. economic growth slowed unexpectedly in the second quarter, as tariffs and Iran war cut into gains - Trusted Moving Group<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/trustedmovinggroups.com\/?p=3409\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"U.S. economic growth slowed unexpectedly in the second quarter, as tariffs and Iran war cut into gains - 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