Why is US GDP growth slowing, and how can it be reversed?

What the report says

Al Jazeera reports that US economic growth weakened in the second quarter of 2026, with gross domestic product expanding 1.5 percent from April through June, down from 2.1 percent in the first quarter. The figures, attributed to a Bureau of Economic Analysis report released Thursday, point to pressure from a larger trade deficit and higher inflation, including elevated petrol prices.

The article says a mix of tariffs and oil-price increases has acted like a supply shock. Michael Klein of Tufts University’s Fletcher School told Al Jazeera that such a combination would be expected to slow activity. BEA data cited in the report showed stronger imports of semiconductors, telecommunications equipment and industrial equipment, alongside a more than 15 percent rise in business equipment investment. Rachel Ziemba of the Center for a New American Security said imports were being lifted by investment and consumption, while domestic production was not rising enough to offset them.

Al Jazeera also reported that the trade gap widened sharply in May to $77.6bn, with exports falling and imports rising. The story links part of the trade environment to President Donald Trump’s tariff policies and notes that Canada has sought new trade arrangements with China and Saudi Arabia amid strained relations with Washington.

Energy costs added another strain. US petrol prices reached $4.48 per gallon in May before easing by late June, though the article says they later rose again in July. The report says recovery would depend on broader business investment, steadier trade policy and consumer confidence. While higher-income consumers continued spending, Klein warned that lower-income households and small firms face tougher conditions, and the Conference Board reported a third straight monthly decline in consumer confidence in July.