The US economy grew by 1.5% in the second quarter of 2026. That is slower than the 2.1% growth in the first quarter.

It also came in below what economists expected. Economists had forecast 2.1% growth.

Rising prices continue to worry financial markets. The Federal Reserve tracks inflation using the PCE index.

That index rose 3.7% over the past year. This is above the Fed's target of 2%.

The slowdown is also linked to the ongoing war in the Middle East. The war has disrupted shipping through the Strait of Hormuz.

It has also pushed up energy costs. Gasoline prices were about $2.98 per gallon before the war. Now gasoline costs more than $4 per gallon.