US Economy Grows 2.2% in Second Quarter of 2026 Amid Elevated Inflation

The US economy grew at an annual rate of 2.2 percent in the second quarter of 2026, according to the Bureau of Economic Analysis, with the figure revised upward by 0.7 percentage point. Consumer spending, investment, and exports drove expansion, while inflation remained elevated with the PCE price index rising 5.0 percent. Real final sales to private domestic purchasers rose 4.6 percent, and real gross output increased 5.0 percent, led by private services-producing industries.

New figures from the Bureau of Economic Analysis show the economy expanded at an annualised pace of 2.2 per cent in the second quarter of 2026, propelled by household spending, business investment and export activity, even as price pressures held above target levels. Second-quarter GDP figures were revised higher by 0.7 percentage points, driven by stronger-than-initially-reported data on business investment, household consumption, and public expenditure. The economy expanded by 2.5 per cent during the opening quarter, a figure that has since been adjusted from the initial projection. Inflation-adjusted expenditure by households and businesses on goods, services, and fixed investment climbed 4.6 per cent across the second quarter. Inflation-adjusted gross domestic income expanded by 2.6 per cent, with the combined average of both inflation-adjusted output measures reaching 2.4 per cent. Inflationary pressures held at persistently high levels. Gross domestic purchases inflation came in at 5.6 per cent, with the personal consumption expenditures measure registering a 5.0 per cent gain. Core inflation, which strips out food and energy costs, rose by 3.3 per cent. Output in private services expanded by 2.5 per cent in real terms, with goods-producing sectors recording growth of 2.3 per cent. The public sector's real value added recorded an increase of under 0.1 per cent. Private services-producing industries posted a 6.0 per cent expansion, driving overall gross output up by 5.0 per cent in real terms. Among the top-contributing sectors were property and data services, durable goods production, and financial and insurance activities. Reductions in transport and warehousing, retail trade, and non-durable goods manufacturing partially counteracted those advances. Gross output from privately owned goods-producing sectors expanded by 3.0 per cent, with public sector production advancing 2.6 per cent.

US Economy Grows 2.2% in Second Quarter of 2026 Amid Elevated Inflation

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US Economy Grows 2.2% in Second Quarter of 2026 Amid Elevated Inflation

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