The deceleration stems from a distinct downturn in government spending alongside cooling investment and export activity. While consumer spending accelerated to provide a partial buffer, the broader economic momentum faltered compared to the first quarter’s 2.1% expansion. Compounding the cooling growth, the GDP Price Index surged by 6.3%, nearly doubling the 3.6% increase recorded in the previous quarter and shattering consensus forecasts.

Despite the broader inflationary alarm, the Federal Reserve’s preferred gauge offered a different signal. The core Personal Consumption Expenditures index, which strips out volatile food and energy costs, rose by 0.1% in June. This result trailed the 0.3% increase seen in May and fell short of the 0.2% growth projected by economists. Gold markets remained largely unmoved by the conflicting signals, with spot gold trading at $4,073.78 per ounce, marking a modest daily gain of 0.21%.