A person shops for ice cream in the freezer aisle of Safeway on July 20, 2026 in San Francisco, California.
Heather Diehl | Getty Images
Economic growth was weaker than expected in the second quarter while inflation in June held well above the Federal Reserve’s goal, the Commerce Department reported Thursday.
Gross domestic product, a broad measure of goods and services, increased just 1.5% for the April-through June period, according to Bureau of Labor Statistics numbers adjusted for seasonality and inflation.
Economists surveyed by Dow Jones had been looking for a growth rate of 1.8%, following the 2.1% increase in the first quarter.
A separate report showed that the personal consumption expenditures price index, which is the Federal Reserve’s primary forecasting gauge, fell a seasonally adjusted 0.1% for the month, putting the annual inflation rate at 3.7%. The readings were in line with forecasts.
Excluding food and energy, core PCE posted a monthly increase of 0.1% and an annual level of 3.3%, against respective forecasts for 0.2% and 3.3%.
While the Fed technically uses the headline PCE number as its gauge for setting policy, most officials consider core inflation as a better indicator of longer-run trends.
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