WASHINGTON, DC / RankWire.AI / – The second quarter of 2026 saw the U.S. economy expand at an annualized rate of 2.2%, according to new estimates. The U.S. Bureau of Economic Analysis revised its previous figure from 1.5%. This update reflects economic activity from April through June. Additionally, officials increased the first-quarter growth rate to 2.5% from an initial estimate of 2.1%. The updated data indicates a stronger domestic economy across key components than earlier calculations suggested.
Major drivers behind the upward revision included increased investment, consumer spending, and government expenditures. Both consumer purchases and business investments contributed positively, although higher imports slightly lowered the headline GDP figure, since imports are subtracted when calculating gross domestic product. During the quarter, current-dollar GDP rose at an 8.5% annual rate. The revised figures also altered estimates for private inventories, fixed investment, and various household spending categories, offering a more comprehensive view of economic activity.
Private fixed investment received upward revisions due to improved estimates for nonresidential structures and residential construction. Updated construction data included commercial and healthcare projects, with data centers among the nonresidential categories influencing the figures. Consumer spending estimates increased for both goods and services, notably in recreational goods, vehicles, and recreation services, all of which contributed to the upward revision. These adjustments resulted in the final GDP estimate surpassing the previous second-quarter figure.
Indicators of domestic demand show improvement
Real final sales to private domestic purchasers grew at a 4.6% annual rate in the second quarter, reflecting a combination of consumer expenditure and private fixed investment, excluding more volatile GDP components. The earlier estimate indicated a growth rate of 4.2%. During the same period, real gross domestic income rose by 2.6%. The average of real GDP and real gross domestic income increased to 2.4%, providing additional insights into the nation’s production and income generation across the economy.
Corporate profits from current production increased by $384 billion in the second quarter. Real value added by private services-producing industries grew by 2.5%, while private goods-producing sectors saw a 2.3% rise. The government sector experienced minimal change, increasing less than 0.1%. Overall, real gross output expanded by 5.0%, with services industries rising by 6.0%, goods industries up 3.0%, and government output climbing 2.6% during this period.
Inflation measures remain elevated but show signs of moderation
The personal consumption expenditures (PCE) price index increased at a 5.0% annual rate in the second quarter, slightly below the previous estimate of 5.3%. The core PCE, which excludes food and energy, rose at a 3.3% annual rate compared to the earlier estimate of 3.6%. The gross domestic purchases price index grew by 5.6%. These quarterly changes are reported by the U.S. Bureau of Economic Analysis at seasonally adjusted annual rates, which differ from year-over-year inflation metrics.
Economic growth varied across states during the second quarter, with real GDP rising in 44 states and the District of Columbia. New York experienced a 4.0% increase, whereas West Virginia saw a 2.3% decline. Personal income in current dollars grew by $314.3 billion, at a 4.7% annual rate. Personal income expanded in 49 states plus the District of Columbia. These latest figures also incorporate the agency’s 2026 annual updates to its economic accounts, covering both national and regional data.