US economic growth slows to 1.5% in second quarter

Jul 30, 2026

The U.S. economy's growth slowed to a 1.5% annual rate in the second quarter of 2026, below expectations and down from 2.1% in Q1. The slowdown is attributed to the Iran war, tariffs, and lower government spending. While consumer spending remains strong, farmers face mounting pressure from rising costs and low crop prices, contributing to a decline in President Trump's approval among rural voters. The Federal Reserve held interest rates steady amid persistent inflation.

Farmer economic pressures

▪Farm bankruptcies in Iowa and nationwide increased in 2025 and 2026 over previous years.
▪The American Farm Bureau Federation projects a $32 billion loss on major crops for U.S. farmers in 2027, up from a projected $31 billion loss in 2026.
▪Farmers are facing rising costs for inputs like diesel and fertilizer due to the Iran war.

Trump administration policies

▪President Trump's tariff regime has shut off markets that U.S. farmers rely on heavily.
▪The Trump administration doubled the "death tax" exemption, easing the financial burden on heirs when farmers pass down their property.
▪The Trump administration has provided billions in direct aid to farmers, including a $12 billion package using tariff revenue.

Rural voter approval decline

▪A July Fox News poll found that 44% of rural Americans approve of President Trump, a 14-point drop from June.
▪President Trump's approval rating among rural voters was 60% at the start of his second term.

Economic Performance Statistics

▪U.S. economic growth slowed to a 1.5% annual rate in the second quarter of 2026, down from 2.1% in the first quarter.
▪Rising imports shaved 1.5 percentage points off second-quarter GDP growth.
▪Consumer spending, which accounts for over two-thirds of US economic activity, grew at a 3.2% annual rate in Q2 2026.
▪The Personal Consumption Expenditures (PCE) price index, an inflation measure watched by the Fed, rose 3.7% in June from a year earlier.

Congressional legislative response

▪Congress has not passed a comprehensive farm bill, which governs agricultural and food programs, since 2018.
▪The House of Representatives approved a $95 billion budget package in July that includes $12 billion in farm aid.

Market Outlook and Federal Reserve Actions

▪Economists had forecast second-quarter GDP growth to be around 1.8% to 2%.
▪New Fed chairman Kevin Warsh stated there is no "magic wand" to bring down high prices.
▪The Federal Reserve held its benchmark interest rate unchanged for the fifth consecutive meeting in July 2026.