Imports hold back US economic growth in Q2, but domestic demand robust

U.S. economic growth slowed in the second quarter as imports widened the trade deficit, but robust consumer spending and business investment related to the buildout of artificial intelligence infrastructure underscored strong domestic demand. The report suggested the economy weathered the initial oil price shock from the Middle East conflict, though renewed hostilities between the United States and Iran posed a downside risk to growth in the second half of the year. Gross domestic product increased at a 1.5% annualized rate last quarter, the Commerce Department's Bureau of Economic Analysis said in its advance estimate of second-quarter GDP. Economists polled by Reuters had forecast GDP rising at a 2.1% pace. Consumer spending surged at a 3.2% rate. Business spending on equipment increased at a 15.2% pace. The trade shortfall sliced off 1.01 percentage points from GDP growth.