America In Focus: US economy expands at sluggish pace, mortgage rate hit the highest level in a year

August 2, 2026 - 03:33

The latest reading on the American economy shows a clear slowdown. From April through June, the gross domestic product expanded at an annual rate of just 1.5 percent. That is a step down from the previous quarter and came in below what many analysts had expected. The main drag, according to the Commerce Department, was a sharp rise in imports. When Americans buy more goods from abroad, that spending counts against domestic output, even if consumer demand itself remains steady.

At the same time, the housing market is feeling fresh pressure. The average rate on a 30-year fixed mortgage has climbed to its highest level in a full year. That jump is making it more expensive to buy a home, and it is cooling off the refinancing boom that many homeowners had been enjoying. Higher borrowing costs are also spilling into other parts of the economy, from auto loans to credit card debt.

The combination of slower growth and pricier credit is raising questions about how much longer consumers can keep spending. So far, household budgets are holding up, and the job market remains relatively firm. But the data suggests the economy is losing momentum. Policymakers will be watching the next few months closely, trying to balance the need to control inflation without tipping the country into a deeper slump. For now, the picture is one of moderation, not collapse, but the margin for error is getting thinner.