The U.S. economy grew at an annualized rate of 1.5% in the second quarter of 2026, the Commerce Department reported Thursday, a deceleration from the 2.1% pace recorded in the first quarter and below the 2.1% rate economists had forecast. Core inflation, the Federal Reserve's preferred gauge excluding food and energy, held at 3.3% year over year, little changed from May's 3.4% reading and still well above the central bank's 2% target.

Consumer spending rose at a 3.2% annualized pace during the quarter, up sharply from 0.5% in the first three months of the year, even as the personal savings rate fell to its lowest level in four years. Business investment in structures contracted for the tenth consecutive quarter, and government spending declined 0.8%, driven in part by sales from the Strategic Petroleum Reserve.

Analysts on financial television described the report Thursday morning as evidence of what several independently chose to call "demand-side enthusiasm," a term used to characterize the fact that Americans spent more money in a quarter where they had measurably less of it saved. One analyst noted that this enthusiasm was particularly strong among households that had, in the same period, drawn down their savings to a four-year low. He described this as bullish. He did not elaborate on bullish for whom.

The framing arrives as the administration continues to press for further reductions in capital gains taxes, arguing that relief for high earners produces broad economic momentum that eventually reaches everyone else. Thursday's report showed growth slowing and inflation holding stubbornly above target while ordinary households spent down their cushion just to keep pace. Analysts described this, too, as evidence the plan is working.

Margaux Dunbar-Pennington maintained complete editorial composure throughout the segment. The chart behind her did not.