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U.S. economy slowed to 1.5% growth rate in Q2; June core inflation at 3.3%
CNBC • • general
Key Points:
- U.S. economic growth slowed to 1.5% in Q2, below the expected 1.8%, following a 2.1% increase in Q1, indicating weaker-than-anticipated expansion.
- Inflation remained elevated in June, with the personal consumption expenditures (PCE) price index rising 3.7% annually, well above the Federal Reserve's 2% target.
- Core PCE inflation, excluding food and energy, increased 0.1% monthly and 3.3% annually, aligning with forecasts and considered by Fed officials as a key long-term inflation indicator.
- Energy prices fell sharply in June, with gasoline dropping 9.2%, partly easing inflation pressures amid recent Middle East tensions, while housing inflation moderated to a 0.2% rise.
- Consumer spending grew 0.3% in June, but personal income rose only 0.2%, leading to a decline in the personal savings rate to 2.7%, the lowest in four years, as consumers tapped savings to cover expenses.
