Economy

The Bureau of Economic Analysis reported annualized real GDP growth of 1.5% for the second quarter of 2026, below the 2.1% economists expected and down from 2.1% in Q1. Consumer spending accelerated to 3.2% and business investment rose 8.4%, but an 11.5% surge in imports subtracted 1.5 percentage points from the headline figure while falling federal nondefense spending contributed an additional drag. The BEA's second estimate, due August 26, may revise components that relied on June projections, including nonresidential structures and certain trade and inventory lines.

The Bureau of Economic Analysis June 2026 Personal Income and Outlays report shows the headline PCE price index dropped 0.1% month-over-month while the annual rate eased from 4.1% to 3.7%, and core PCE held at a 3.3% annual rate. Real consumer spending rose 0.4%, matching May's pace despite nominal spending growth slowing sharply from 0.9% to 0.3%, a gap explained by the monthly price decline. Personal income grew just 0.2% in June after a revised 0.7% gain in May, and the personal saving rate edged down to 2.7%, with the Federal Reserve holding its benchmark rate at 3.5% to 3.75% the day before the report's release.

The Bank of England's MPC voted 6-3 on July 29, 2026, to keep the Bank Rate at 3.75%, with Greene, Mann, and Pill preferring a rise to 4.00% — a wider split than June's 7-2 hold. The Bank's central inflation forecast peaks at 3.2% in Q4 2026 before returning to the 2% target in 2027, though an adverse energy scenario could push the peak to 4.5% in Q2 2027. Three data releases before the September 17 meeting — CPI on August 19, wages on August 18, and the Ofgem price cap on August 26 — will shape whether the dissenting minority grows further.

The Bank of Japan voted 8-1 on July 31, 2026, to keep its policy rate at 1.0 percent, one meeting after raising it from 0.75 percent, while revising its fiscal 2026 core CPI median forecast down 0.3 percentage points to 2.5 percent. Board member Hajime Takata dissented in favor of an immediate hike to 1.25 percent, citing upside price risks from overseas demand shocks. Governor Ueda signaled the Board could accelerate rate increases if monetary conditions remain accommodative, with the next policy meeting identified as the starting point for that assessment.

The Bureau of Labor Statistics publishes its Q2 2026 Employment Cost Index at 8:30 a.m. ET today, offering the broadest quarterly measure of U.S. employer labor costs across wages, salaries, and benefits. The most recent available data, from Q1 2026, showed private-industry total compensation up 0.9% quarter-on-quarter and 3.4% year-over-year, with notable divergences by sector including aircraft manufacturing at 3.4% quarterly and construction occupations at just 0.3%. Today's release will provide a direct comparison to Q2 2025, when private-industry total compensation rose 3.5% year-over-year, against a backdrop of core PCE inflation running at 3.3% and the Federal Reserve holding its target rate at 3.5 to 3.75 percent.