US Economy Grew 1.5% in Second Quarter, BEA's Second GDP Estimate Confirms

The US economy grew at an annualized rate of 1.5% in the second quarter of 2026, the Bureau of Economic Analysis confirmed on August 26 in its second estimate for the April-to-June period. That's the same pace as the government's initial "advance" estimate a month earlier, and slower than the 2.1% growth logged in the first quarter.

What's driving growth: consumers kept spending, businesses kept investing, and exports rose. What's holding it back: government spending fell, and imports — which are subtracted when calculating GDP — increased more than before.

One number stood out. Corporate profits jumped $400.9 billion in the second quarter, more than five times the $74.4 billion increase seen in the first quarter — a sign that companies are managing to protect margins even as overall growth cools.

A broader income-based measure of the economy, gross domestic income, actually grew faster than GDP, at 2.2%. Economists watch the gap between these two measures — which should theoretically match — as one gauge of how reliable the headline growth number really is. Inflation measures tied to this report also ticked slightly higher than first thought.

Growth Confirmed at 1.5%, a Step Down From Q1

The Bureau of Economic Analysis's second estimate, released August 26, 2026, left second-quarter real GDP growth unchanged from the advance estimate at an annualized 1.5%, equivalent to about 0.4% growth on a non-annualized quarterly basis. That compares with 2.1% annualized growth in the first quarter of 2026. The deceleration reflected a downturn in government spending and slower growth in investment and exports, partly offset by a pickup in consumer spending; imports, a subtraction in the GDP calculation, rose more than they had in the first quarter.

Where the Revisions Came From

Although the headline growth rate held at 1.5%, the composition shifted modestly from the advance estimate. Consumer spending was revised up, reflecting stronger services spending — particularly health care, based on new US Census Bureau Quarterly Services Survey data — while goods spending was revised down, led by recreational goods and vehicles and by gasoline and other energy goods. That upward revision to consumer spending was offset by an upward revision to imports, led by other goods, notably a territorial adjustment tied to trade data for Puerto Rico. Real final sales to private domestic purchasers — consumer spending plus fixed investment, seen by many economists as a cleaner read on domestic demand — rose 4.2%, a 0.3 percentage point upward revision from the advance estimate.

Inflation Measures Nudge Higher

Price measures embedded in the GDP report were revised slightly upward. The price index for gross domestic purchases rose 5.8% in the second quarter, revised up 0.1 percentage point. The personal consumption expenditures (PCE) price index — a gauge the Federal Reserve watches closely — rose 5.3%, revised up 0.2 percentage point, while the core PCE price index, which excludes food and energy, rose 3.6%, also revised up 0.2 percentage point. These upward price revisions, alongside the unchanged real growth figure, point to a slightly hotter nominal economy than the advance estimate suggested; current-dollar GDP growth was revised up to 8.0% from 7.9%.

Profits and Income Paint a Firmer Picture

Two other measures in the release suggest the underlying economy may be sturdier than the 1.5% headline figure implies. Real gross domestic income (GDI) — which measures the economy from the income side rather than the spending side, and is considered by some economists a more reliable read in periods of data noise — rose 2.2% in the second quarter, up from 1.2% in the first quarter. The average of real GDP and real GDI, a blended measure the BEA has increasingly highlighted, rose 1.8%, versus 1.7% in the first quarter. Corporate profits from current production increased $400.9 billion in the second quarter, sharply higher than the $74.4 billion increase in the first quarter.

What's Next

The BEA's third and final estimate for second-quarter GDP, along with state-level GDP and personal income data, is scheduled for release on September 30, 2026 — the same day the bureau will for the first time synchronize its national, industry, and regional annual data updates. Markets will parse that release, together with upcoming employment and inflation data, for signals on whether the Federal Reserve's next policy moves should lean toward further easing or a pause.