The U.S. economy grew at an annualized rate of 1.5% in the second quarter of 2026, slowing from 2.1% in the first quarter and missing the 2.1% consensus forecast from a Reuters poll of economists. The deceleration reflected pressure from the ongoing conflict with Iran, which disrupted shipping through the Strait of Hormuz and pushed gasoline prices from a pre-war average of $2.98 a gallon to well above $4. Household spending accelerated to a 3.2% annualized clip, while business fixed investment expanded at an 8.4% rate driven by heavy corporate commitment to artificial intelligence buildout. A sharp 11.5% increase in imports cut 1.5 percentage points from headline GDP, and a decrease in government spending also dragged on growth. The personal consumption expenditures price index rose 3.7% in June from a year earlier, easing from 4.1% in May, while core PCE rose 3.3%.