\n<\/p>\n
There was a surprise slowdown in US economic growth<\/b> <\/b>in the three months to June despite an increase in consumer spending, according to official figures.<\/b><\/p>\n
The Commerce Department said the US economy grew at an annual rate of 1.5% in the second quarter, down from 2.1% seen in the first three months of the year. Analysts had forecast growth to remain around 2%.<\/p>\n
It comes as the world’s largest economy continues to weather the financial impact of the war with Iran and US businesses navigate tariffs.<\/p>\n
The second quarter downturn was due to lower government spending, investment and exports, which offset the boost in consumer spending.<\/p>\n
Consumer spending, which accounts for more than two-thirds of economic activity in the US, grew at a rate of 3.2% last quarter after slowing to 0.5% earlier this year.<\/p>\n
Despite prices rising at 3.5% in the year to June, Americans continued to spend on motor vehicles – particularly light-duty trucks – furniture and prescription drugs, according to surveys. <\/p>\n
Michael Pearce, chief US economist at Oxford Economics, said the growth slowdown underplayed the “strength” of the US economy and suggested the pace would return to above 2% later this year.<\/p>\n
He said there were signs that investment in industries away from the AI boom was “reviving”. <\/p>\n
Pearce added that “surging AI-related investment is still the biggest game in town”, but said the rise in imports of microchips used in its development mean its contribution to growth remained “modest”.<\/p>\n