In the second quarter, U.S. economic growth slowed to 1.5%, primarily due to high imports that support the artificial intelligence sector, negatively impacting GDP calculations. Strong demand for imported semiconductors has offset some domestic growth. However, consumer spending has increased despite rising gas prices linked to the conflict with Iran, and business investment remains robust as companies invest in IT equipment and software for AI development.

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https://www.wsj.com/economy/u-s-economic-growth-slowed-to-1-5-in-second-quarter-003c464f

U.S. Economic Growth Slowed to 1.5% in Second Quarter

Imports to help fuel AI boom weigh on GDP calculations, but consumer spending picks up

Harriet Torry

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The Federal Reserve left interest rates unchanged but three bank presidents dissented in favor of an increase. WSJ’s Nick Timiraos lays out his three takeaways from Chairman Kevin Warsh’s second policy meeting.Photo: Al Drago/Bloomberg News

U.S. economic growth slowed in the second quarter, weighed down by strong imports to fuel the artificial-intelligence boom.

The AI surge has become such a huge part of the economy that it’s a big growth driver and also affects trade in a way that can offset some of that growth. Specifically, high demand for imported components like semiconductors weighs against the U.S. growth calculation because the products aren’t made in the U.S.

At the same time, Thursday’s gross domestic product report included positive signs on other fronts. Consumers increased their spending, shrugging off a surge in gas prices fueled by the conflict with Iran. Business investment remained strong as companies kept investing in IT equipment and software for the AI build-out.

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U.S. Economic Growth Slowed to 1.5% in Second Quarter

U.S. Economic Growth Slowed to 1.5% in Second Quarter

Imports to help fuel AI boom weigh on GDP calculations, but consumer spending picks up

The numbers

Videos

Most Popular News

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