A government report on Thursday will show whether the United States economy held sturdy as an inflation surge took hold over the early months of the Iran war.
The fresh data is set to provide gross domestic product (GDP) over three months ending in June, a period that followed a historic global oil shock.
The national average price for a gallon of gasoline soared to a price as high as $4.56 a gallon in May, AAA data showed, before easing somewhat after a preliminary peace agreement last month.
Annual inflation has climbed to 3.5%, putting it more than percentage point higher than the Federal Reserve’s target rate of 2%.
Still, hiring has proven more resilient than many economists feared, despite elevated costs for businesses and shoppers.
Economists expect GDP to have grown at an annualized pace of 1.8% in the second quarter, which would mark a slight slowdown from 2.1% growth in the previous three-month period.
Still, the anticipated figure would amount to better performance than 0.5% annualized GDP recorded over final three months of 2025.
In recent quarters, a burst of investment in artificial intelligence has accounted for a large share of the nation’s economic growth.
A surge of AI spending accounted for roughly two-thirds of gross domestic product growth over the first half of 2025, JPMorgan Asset Management found, outpacing the contribution made by hundreds of millions of U.S. consumers. Many of the nation’s largest companies have poured funds into the chips and data centers necessary to operate AI.
Observers will likely pay close attention to whether that trend held steady in the data to be released on Thursday.
In this picture obtained from Iran’s ISNA news agency on June 18, 2026, vessels are seen anchored in Bandar Abbas along the Strait of Hormuz.
Amirhossein Khorgooei/ISNAvia AFP via Getty Images, FILE
The combination of elevated inflation and a resilient labor market, meanwhile, has raised the chances of an interest rate hike, futures markets show. The prospect of a rate increase poses the risk of a slowdown in economic activity over the coming months as corporations face the prospect of higher borrowing costs.
The Federal Reserve was set to announce its latest decision on the level of interest rates on Wednesday afternoon, just hours before the release of the GDP data.
The benchmark rate stands at a level between 3.5% and 3.75%. That figure marks a significant drop from a recent peak attained in 2023, but borrowing costs remain well above a 0% rate established at the outset of the COVID-19 pandemic.
Fed Chair Kevin Warsh, who took the helm of the central bank this summer, has vowed to dial back inflation.
“Persistently high prices are a burden for the American people,” Warsh told reporters in Washington, D.C., last month. “This committee will deliver price stability.”
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