Why is US GDP growth slowing, and how can it be reversed?

Core Impact Points

• The US trade deficit grew in Q2 2026, contributing to a slowdown in GDP growth.
• A widening trade deficit and jump in petrol prices are key reasons for the slowdown, according to experts.
• Business investment in equipment rose by over 15% in Q2, driven by the ongoing investment boom in AI.
• Exports have not kept pace with imports, with the trade deficit in May growing to $77.6bn, a 42% increase from the previous month.
• Uncertain trade policies and concerns about widespread layoffs have made consumers more cautious with their spending.
• Creating economic conditions that encourage consumers and businesses to spend would help drive up GDP in the coming quarters.