US Growth Cools to 1.5% as Trade Deficit Outweighs Consumer Resilience

The report from ICICI Bank attributes the cooling growth primarily to a sharp rise in net imports and a 0.8 percent contraction in government outlays. Despite these headwinds, the engine of the domestic economy showed renewed vitality; private consumption jumped to 3.2 percent from a sluggish 0.5 percent in the previous quarter. Analysts pointed to tax refunds and the economic ripple effects of hosting the FIFA World Cup as significant catalysts for this rebound.

Business investment remains anchored by the technology sector, where heavy spending on artificial intelligence continues to drive non-residential capital expenditure. Final sales to private domestic purchasers climbed to 3.9 percent, the strongest reading since early 2026. Looking ahead, the bank estimates full-year growth at approximately 2 percent. While the current data supports the Federal Reserve’s strategy to hold interest rates steady, energy price volatility lingers as a potential trigger for future monetary tightening should inflation begin to climb.