USA Q2 GDP Below Expectations but Composition Strong

Economics Research 30 July 2026 | 12:10PM EDT

USA: Q2 GDP Below Expectations but Composition Strong; Core PCE Slightly Below Expectations; Initial Claims Roughly in Line With

BOTTOM LINE: Real GDP grew 1.5% annualized in the second quarter, below Jan Hatzius | expectations, but the composition was strong as consumer spending and Goldman Sachs & Co. LLC

nonresidential fixed investment rose sharply. Private domestic final sales adjusted to David Mericle | account for the value of AI investment that is imported rose 3.3% annualized. Core Goldman Sachs & Co. LLC PCE increased 0.13% in June, slightly below expectations, and 3.29% year-over-year. We expect core inflation to remain benign in the coming months. Initial claims Alec Phillips | Goldman Sachs & Co. LLC rebounded after seasonal adjustment issues likely drove them to multi-decade lows in the prior week. We launched our Q3 GDP tracking estimate at +2.4% Ronnie Walker | (quarter-over-quarter annualized) and our Q3 domestic final sales estimate at Goldman Sachs & Co. LLC +1.9%. Elsie Peng | US MAP: Goldman Sachs & Co. LLC

Pierfrancesco Mei GDP -4 (4, -1) | Goldman Sachs & Co. LLC Personal spending -1 (1, -1) Jessica Rindels | Initial claims 0 (2, 0) Goldman Sachs & Co. LLC

GDP (advance estimate) +1.5% (QoQ AR) for Q2 vs. GS +1.8%, median forecast +2.0%, prior +2.1%

Personal consumption +3.2% (QoQ AR) for Q2 vs. GS +2.3%, median forecast +2.3%, prior +0.5%

Personal income +0.2% for June vs. GS +0.4%, median forecast +0.3%, prior +0.7%

Personal spending +0.3% for June vs. GS +0.6%, median forecast +0.4%, prior revised +0.9%

Core PCE price index +0.13% (MoM) for June vs. GS +0.18%, median forecast +0.2%, prior revised +0.33%

Core PCE price index +3.29% (YoY) for June vs. GS +3.32%, consensus +3.3%, prior revised +3.42%

PCE price index -0.11% (MoM) for June vs. GS -0.07%, median forecast -0.1%, prior revised +0.46%

PCE price index +3.67% (YoY) for June vs. GS +3.70%, consensus +3.7%, prior revised +4.08%

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Initial claims 197k for the week ended July 25 vs. GS 205k, median forecast 200k, prior revised 188k

Continuing claims 1,782k for the week ended July 18 vs. median forecast 1,795k, prior revised 1,789k

1. Real GDP grew 1.5% annualized in the second quarter, below expectations, but the composition was strong. Consumer spending rose 3.2%, above expectations, likely reflecting tailwinds from supportive fiscal policy in the first half of the year and a boost from World Cup-related spending in June. Nonresidential fixed investment rose 8.4%, largely reflecting increases in the industrial equipment (+29.1%), transportation equipment (+29.3%), and software components. Housing investment increased by 1.5%, the first quarterly increase since 2024Q4. On net, private domestic final sales adjusted to account for the value of AI investment that is imported rose 3.3% annualized, but were likely boosted modestly by a pickup in equipment imports driven by a decline in tariff rates. Net trade and inventory accumulation subtracted 1.0pp and 0.7pp from GDP growth in Q2, respectively. Federal government spending subtracted an additional 0.3pp from Q2 GDP growth, largely reflecting the impact of drawdowns of the US Strategic Petroleum Reserve (SPR), as SPR releases are subtracted from GDP growth via lower federal government nondefense spending and would have offset the increase in oil exports that boosted GDP growth in Q2.

2. Personal income rose 0.2% in June, slightly below expectations and partially reflecting a 0.1pp drag from a decline in proprietors’ income, following last month’s payments from the Farmer Bridge Assistance program. Employee compensation rose 0.2%, rental income rose 0.7%, personal asset receipts rose 0.6%, and transfer payments rose 0.5%. Year-over-year real disposable personal income reached 0.5% in June. Personal spending rose 0.3% in June, below expectations. Real personal spending rose 0.4%, reflecting a 0.3% increase in real services spending and a 0.7% increase in real goods spending. The…