The U.S. economy expanded at a 2.2% annualised rate in the second quarter of 2026, with stronger household spending and business investment helping deliver a substantial upgrade to earlier estimates.
The Bureau of Economic Analysis reported the revised U.S. GDP growth figure for April through June on September 30. It was higher than the previous 1.5% estimate, although growth slowed from a revised 2.5% pace in the first quarter. Consumer spending, investment and exports contributed to the expansion, while rising imports reduced the headline rate.
Consumer Spending Accelerated to 3.8%
Household spending provided an important source of momentum during the quarter, increasing at a 3.8% annual rate after rising just 0.7% during the first three months of the year.
The acceleration matters because consumer activity accounts for more than two-thirds of the U.S. economy. Strong equity markets have also supported household wealth, particularly among higher-income Americans with greater exposure to stocks.
Business spending provided another source of strength. Non-residential investment increased at a 9% annual pace, with spending associated with artificial intelligence infrastructure contributing to the increase.
Imports, however, moved sharply in the opposite direction from the perspective of the GDP calculation. They increased at a 12.6% annual rate and reduced second-quarter growth by almost 1.7 percentage points. Imports are deducted when calculating GDP because the measure is designed to capture goods and services produced domestically.
Part of the increase reflected shipments of semiconductors and other equipment needed for AI-related investment. That creates an unusual dynamic in the data: companies can invest heavily in infrastructure that supports future domestic activity while the imported components required for those projects initially subtract from measured GDP.
Housing investment also increased 2.8%, marking its first quarterly rise since the end of 2024 after elevated mortgage rates weighed on the sector.
AI Spending Is Becoming a Bigger Economic Force
The underlying domestic figures suggest the economy had more momentum than the 2.2% headline rate alone indicates. Real final sales to private domestic purchasers, a measure covering consumer spending and private fixed investment, increased at a 4.6% annual pace, according to the latest figures.
That measure is useful because it removes some of the volatility created by trade and government spending, providing a clearer view of demand generated by households and businesses.
Artificial intelligence is increasingly important to that picture. The current investment cycle involves spending on data centres, semiconductors, computing equipment, power infrastructure and related technology. Oxford Economics has estimated that AI-related investment could reach $3.8 trillion between 2024 and 2028, highlighting the scale of capital being directed towards the sector.
The economic effect extends beyond corporate capital expenditure. Rising technology valuations can increase the wealth of households that own equities, potentially supporting consumption at the same time that companies increase spending on AI infrastructure.
That concentration also creates risk. Michael Pearce, chief U.S. economist at Oxford Economics, said the economy was becoming more dependent on AI-related gains and the resulting wealth effect among higher-income households. He warned that growth could therefore become more sensitive if investor confidence in the technology sector deteriorates.
The issue for investors is not simply whether AI spending continues, but whether companies ultimately generate returns sufficient to justify the scale of capital being committed. A prolonged investment cycle could keep supporting economic activity, while weaker expectations for AI profitability could affect both corporate expenditure and equity-linked household wealth.
October GDP Data Will Test the Momentum
The second-quarter release closes the government’s three-stage estimate process for the period and leaves attention focused on whether the strength continued into the second half of 2026.
The Bureau of Economic Analysis is scheduled to publish its first estimate of third-quarter GDP on October 29. That report should provide a clearer indication of whether strong private demand and AI-related capital spending continued to offset pressure from trade, energy costs and elevated borrowing rates.
For markets, the composition of growth may matter as much as the headline number. Continued strength in consumption and technology investment would show that domestic demand remains firm, but it would also reinforce how much recent economic momentum has become connected to the continuing AI investment cycle.
