Quick Take on US Q2 GDP Data

Despite a rebound in consumer spending and robust business investment, the US economy’s growth rate in the second quarter fell short of expectations. The US economy has so far withstood the impact of the Middle East conflict. Although the conflict pushed up prices and dampened confidence, lower gasoline costs at the end of the quarter, higher-than-usual tax refunds, and promotional activities supported household spending. The surge in large-scale AI investment also played a key role. After the Federal Reserve decided to hold interest rates steady, Fed Chair Walsh described the economy’s resilience as “impressive,” but noted that the most striking feature of the economy was the strong momentum in business investment.