The economy slowed a bit -- but Americans continued to spend

Accessibility links Skip to main content Keyboard shortcuts for audio player Open Navigation Menu --> Newsletters NPR Shop Get NPR+ Close Navigation Menu Home News Expand/collapse submenu for News National World Politics Business Health Science Climate Race Culture Expand/collapse submenu for Culture Books Movies Television Pop Culture Food Art & Design Performing Arts Life Kit Gaming Music Expand/collapse submenu for Music Tiny Desk New Music Friday All Songs Considered Music Features Live Sessions Podcasts & Shows Expand/collapse submenu for Podcasts & Shows Daily Morning Edition Weekend Edition Saturday Weekend Edition Sunday All Things Considered Up First Here & Now NPR Politics Podcast Featured Wait Wait...Don't Tell Me! Fresh Air Wild Card with Rachel Martin It's Been a Minute Embedded Get NPR+ More Podcasts & Shows Search Newsletters NPR Shop Get NPR+ Tiny Desk New Music Friday All Songs Considered Music Features Live Sessions About NPR Diversity Support Careers Press Ethics The economy slowed a bit -- but Americans continued to spend The U.S. economy grew at an annual rate of 1.5% in the spring, according to the Commerce Department. That's a modest slowdown from the previous quarter — but consumer spending picked up steam. economy in April, May and June, as GDP expanded at an annual rate of 1.5%. Joe Raedle/Getty Images North America hide caption The U.S. economy grew more slowly this spring than it did earlier in the year, but consumers continue to spend freely. Gross domestic product — the broadest measure of economic activity — grew at an annual rate of 1.5% in April, May and June, according to a report Thursday from the Commerce Department. That's a modest slowdown from the first three months of the year when GDP grew at a 2.1% pace. A decline in government spending and a jump in imports, which count against the domestic tally, account for much of the change. Consumer spending continues to power the economy, growing at a solid 2.1% pace during the second quarter. It's not clear how long shoppers can keep that up, however, in the face of rising prices. Loading... A separate report from the Commerce Department shows prices in June were up 3.7% from a year earlier. Inflation has been outpacing wage gains in recent months, forcing shoppers to dip into savings or borrow money to support their spending. The personal savings rate fell to 2.7% in June — a three year low. The Commerce Department's inflation yardstick is closely watched by the Federal Reserve. Prices have been climbing faster than the central bank would like. But the Fed opted not to raise its benchmark interest rate on Wednesday. Economy A divided Federal Reserve holds interest rates steady despite high inflation Trade swings weighed on GDP during the quarter. Exports rose during the quarter, but imports rose faster. "Trade has gone up and down and all around and clearly the tariffs are swinging things around," said Mark Zandi, chief economist at Moody's Analytics. "One quarter it might add to growth. The next quarter it might subtract from growth. Net over time, it's kind of sort of a wash." Sponsor Message Become an NPR sponsor