Soft 1.5% GDP exposes thin underlying growth propped by AI and the rich

• Real GDP rose at a 1.5% annualized pace in the second quarter.
• That missed economist forecasts of roughly 1.8% to 2.1%.
• Growth slowed from 2.1% in the first quarter.
• Consumer spending jumped 3.2% after a weak prior quarter.
• Business investment stayed solid, led by equipment and software tied to the AI buildout.
• Inventories subtracted about 0.7 percentage points.
• Government spending declined and net exports also weighed on the headline.
• Final sales to private domestic purchasers rose a stronger 3.9%.
• Core PCE inflation came in at 3.3% year-over-year.
• Top-end households continue to drive a large share of overall spending.
• The bottom 80% of households show softer real spending power.
• Markets initially reacted with higher Treasury yields while stocks mixed.

‼️ US ECONOMIC GROWTH SLOWS TO 1.5% in Q2.

– Missed expectations and Slowed hard from Q1.

– Large share of what’s left is just the AI spending surge from Big Tech.

– Strip that out and the “strong economy” narrative gets a lot thinner. pic.twitter.com/jqPYurM8DP

— Maine (@TheMaineWonk) July 30, 2026

Advanced GDP Deflator comes in at a blistering 6.3%; is that a mistake?

— Michael J. Kramer (@MichaelMOTTCM) July 30, 2026

The same AI investment boom that is propping GDP is the one seeing margin pressure and stock selloffs in memory and semiconductor names. Fed officials remain split, with three already wanting rate hikes while the chair keeps talking tough without moving. Middle-class real spending remains the soft underbelly of the data.