Growth
GDP — Q2 2026
Second estimate · released August 26, 2026 · 8:30 AM ET · Source: U.S. Bureau of Economic Analysis
The read · narrated
The read
Here’s a number that landed right where it started. Second-quarter growth: one and a half percent, same as a month ago. The fine print calls it a downward revision of less than a tenth. The pieces underneath moved more.
That was the second estimate; each quarter gets published three times as more data comes in. The official line: an upward revision to consumer spending, partly offset by an upward revision to imports. Two moves, opposite directions.
Here’s the arithmetic. The consumer went from adding two point one two points to two point three one. The subtracting lines — inventories, trade, government — went from taking off one point eight two to two point oh two. Demand up two tenths. Drags up two tenths.
The consumer revision has a shape. Services up, led by health care — hospitals and doctor visits — from a survey that hadn’t landed in July. Goods down: recreational goods, computing equipment, gasoline, once retail and energy data got revised.
Now the offset. Imports subtract from growth by arithmetic, not by weakness. But this one wasn’t Americans buying more from abroad. It was led by a territorial adjustment for Puerto Rico — which these accounts treat as the rest of the world.
Which is why the same release carries a second measure: final sales to private domestic purchasers. Demand inside the country, inventories and trade stripped out. Revised up three tenths, to four point two percent — the line our July read called what the Fed watches.
That read closed on two questions. Whether inventories and trade kept subtracting — they did, by more. And whether the consumer could keep spending — that got revised up.
One more thing moved. The inflation gauge inside these same accounts — consumer prices excluding food and energy — was revised up two tenths, to three point six percent annualized.
So a release that left the headline alone moved both things the Fed weighs, demand and prices, the same way. Up. On the morning, the two-year moved two basis points. Our claims read said the case for easing wasn’t building. This didn’t build it.
The catch: a second estimate is still an estimate. The third lands September thirtieth, with the annual update that rewrites history. But the Fed meets the sixteenth. That’s the read they’ll have.
The numbers
| Measure | Latest | Trend |
|---|---|---|
| Real GDP (annualized) | +1.5% · Q2 | ▼ unchanged in revision; still down from Q1’s +2.1% |
| Demand inside the country | +4.2% · Q2 | ▲ revised up 0.3 — the measure the Fed watches |
Gross Domestic Product (Second Estimate) and Corporate Profits, second quarter 2026, U.S. Bureau of Economic Analysis, released August 26, 2026 (BEA 26–38). The headline is the percent change in real GDP at a seasonally adjusted annual rate (NIPA Table 1.1.1). Contributions in percentage points — personal consumption, fixed investment, change in private inventories, net exports and government — are from NIPA Table 1.1.2; they sum to the published 1.5%. What the revision did: real GDP was unchanged at 1.5% — BEA describes it as “a downward revision of less than 0.1 percentage point,” so the underlying figure edged down without changing at the published rounding. Underneath it, four of the five components moved. Consumer spending went from +2.12 points to +2.31; inventories from −0.67 to −0.72, net exports from −1.01 to −1.14 and government from −0.14 to −0.16, a combined drag rising from 1.82 to 2.02 points. Fixed investment was unchanged at +1.20. Demand up roughly two tenths, drags up roughly two tenths: the two offset to within a hundredth of a point. Where the revisions came from (BEA Technical Notes): the upward revision to consumer spending reflected an upward revision to services — led by health care, mainly hospitals and physician services, on newly available Census Bureau Quarterly Services Survey data — partly offset by a downward revision to goods, led by recreational goods and vehicles (mainly information processing equipment) on revised Census Monthly Retail Trade Survey data for May and June, plus gasoline and other energy goods on new Energy Information Administration data for May. The import revision was led by other goods, notably the territorial adjustment for Puerto Rico, primarily reflecting new Census trade-in-goods data for June; in the National Income and Product Accounts, U.S. territories are included in the rest of the world. That matters for reading the offset: it is substantially an accounting adjustment, not households buying more from abroad. “Demand inside the country” is BEA’s real final sales to private domestic purchasers — consumer spending plus gross private fixed investment — which rose 4.2%, revised up 0.3 percentage point. Note on construction: our July read cited this concept as a contribution in percentage points (+3.32, since revised to +3.51); this read cites BEA’s published percent change (3.9% revised to 4.2%). Same concept, two different constructions — the figures are not directly comparable to one another. Prices inside these accounts: the PCE price index rose 5.3% (revised up 0.2), the PCE price index excluding food and energy 3.6% (revised up 0.2), and the gross domestic purchases price index 5.8% (revised up 0.1). These are quarterly annualized rates from the GDP accounts and are not the same figures as the monthly year-over-year PCE inflation rates reported in Personal Income and Outlays. Also in this release, not cited above: real gross domestic income rose 2.2% (against real GDP’s 1.5%; the average of the two, 1.8%), and profits from current production rose $400.9 billion after $74.4 billion in the first quarter — both published for the first time at the second estimate. Market reaction: the 2-year Treasury par yield closed at 4.19% on August 26 against 4.17% on August 25, a move of 2 basis points (U.S. Department of the Treasury, daily par yield curve). Inventories and net exports are the most volatile components and routinely reverse; imports subtract from GDP by construction. This is the second estimate, revised once more: the third estimate lands September 30, 2026, alongside BEA’s 2026 annual update of the National, Industry and Regional Economic Accounts — beginning on the same day for the first time — which revises history. The Federal Open Market Committee meets September 16–17, before that revision. Next report: Wednesday, September 30, 2026, 8:30 AM ET.