U.S. Economic Growth Slowed in Second Quarter

As GDP growth cooled to 1.5%, households face rising costs from higher mortgage rates and oil prices.

Updated on Sept. 29, 2026 in Economic Indicators

Isometric editorial illustration of a single shipping container on a concrete platform, representing logistics and industrial investment. — The U.S. economy grew at a 1.5% annual rate in the second quarter of 2026, as business investment shifts and rising energy costs cooled growth. AI Illustration. Upload story photo >

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Do you expect the national economy to keep growing over the next few months?

The U.S. economy grew at an annual rate of 1.5% in the second quarter of 2026, down from 2.1% in the first quarter. This shift comes as consumer spending and business investments are being balanced against new financial headwinds.

Why it matters

Growth has been sustained by business investment in inventories and artificial intelligence, yet rising oil prices and mortgage rates are creating increased pressure on household budgets. These factors are expected to influence spending patterns as the year progresses.

The economy recorded a 1.5% annual growth rate in the second quarter of 2026, following a 2.1% rate in the first quarter. While the stock market has maintained a four-year bull run, economists project growth will moderate further in the fourth quarter.

The players

Bureau of Economic Analysis

The federal agency that provides official government statistics on national economic growth and output.

The details

The Bureau of Economic Analysis calculates GDP by totaling consumer spending, business investment, government outlays, and net exports. While businesses have increased spending on inventories and AI infrastructure, much of that tech expenditure flows to manufacturers abroad. These investments are now competing with household expenses affected by elevated oil and borrowing costs.

Q1 2026: Economy grew at a 2.1% annual rate.
Q2 2026: Economy grew at a 1.5% annual rate.
Wednesday, Sept 30, 2026: BEA releases third estimate of second-quarter GDP.
Q3 2026: GDP growth is expected to continue.
Q4 2026: GDP growth is projected to slow.

Money Landscape

The recent moderation in GDP growth follows a sustained four-year bull market in equities. Current conditions mark a shift as domestic economic activity begins to contend with tightening cost pressures.

Rising oil prices and mortgage rates may limit your discretionary income despite recent tax refunds. Review your monthly budget to ensure your savings can accommodate these higher fixed costs as economic growth slows.

The takeaway

Economic growth is cooling as external costs begin to outweigh previous gains from consumer spending and inventory restocking. Monitor upcoming quarterly reports for signals on whether these trends will further impact your household's cost of living.