America In Focus: US economy expands at sluggish pace, mortgage rate hit the highest level in a year

The economy, inflation and how those forces could impact the lives of Americans were front and center over the past week. Trips to the grocery store and gas station are more painful than they were last year, and rising costs are impacting the decisions of both households and businesses.

Here’s a snapshot of prominent economic data and news that occurred over the past week and what it potentially means for you.

The U.S. economy expanded at a sluggish 1.5% pace from April through June as rising imports weighed on growth. But consumer spending rose. And the Federal Reserve’s favored measure of inflation grew more slowly last month, but remained above the central bank’s 2% target.

The Commerce Department reported this week that growth in U.S. gross domestic product — the nation’s output of goods and services — decelerated from 2.1% in the first three months of 2026 and came in below economists’ expectations. But consumer spending — which accounts for about 70% of U.S. economic activity — increased at a 3.2% annual clip, up from 0.5% in the January-March period.

Business investment, excluding housing, rose at an 8.4% pace, down from 10.6% from January through March but strong, reflecting a surge in investment in artificial intelligence .

The average long-term U.S. mortgage rate rose for the fourth consecutive week to its highest level in a year, another setback for prospective homebuyers hoping for a break from elevated home loan borrowing costs.

The benchmark 30-year fixed rate mortgage rate rose to 6.66% from 6.58% last week, mortgage buyer Freddie Mac said Thursday. One year ago, the average rate was 6.72%.

Borrowing costs on 15-year fixed-rate mortgages, often sought by borrowers refinancing a home loan, also rose this week. That average rate increased to 6.04% from 5.96% last week. A year ago, it was at 5.85%, Freddie Mac said.

Americans’ confidence in the economy fell this month as gas prices ticked up along with the fighting between the U.S. and Iran.

The Conference Board said Tuesday that its consumer confidence index fell to 90.8 in July from 92.2 in June. That’s essentially the same tepid range its been in since the beginning of the year. In late 2024 and early 2025 the readings were well above 100.

Consumer attitudes had improved modestly in June as gas prices came down to around $3.70 a gallon. from more than $4.50 a gallon in late April and early May. But as fighting in the Middle East escalated, the average price for a gallon of regular gas in the U.S. started to rise again. Prices ticked up again overnight to $4.11 per gallon, according to the auto club AAA.

The U.S. stock market swung wildly but ended the week with gains. Amazon leapt, Apple sank, and rising oil prices added to worries about inflation already squeezing the bond market .

Questions remain about when crude will again flow freely again from the Middle East.

The price for a barrel of Brent crude rose 2.1% to $88.68 after careening between $72 and $102 earlier in July.

Higher oil prices have pushed the cost for a gallon of regular gasoline to an average of nearly $4.11 across the United States, up from $3.85 a month ago, according to AAA.

The Federal Reserve left its key interest rate unchanged Wednesday, although three officials dissented in favor of higher rates as the central bank wrestles with how to deal with persistently high inflation.

The Fed’s rate-setting committee reached its decision after two days of deliberations, marking the fifth straight meeting at which the benchmark rate was kept at around 3.6%.

Some economists and Wall Street analysts had predicted the Fed would hike its rate by a quarter point. But while the decision to stand pat could be seen as good news for consumers, they might not feel much relief with the average credit card rate still near 20% and mortgage rates the highest since last August.

The number of Americans applying for unemployment benefits rose last week but layoffs remain in the historically healthy range of the past few years.

U.S. filings for jobless aid in the week ending July 25 rose by 9,000 to 197,000, the Labor Department reported Thursday. The previous week’s figure was revised up by 1,000 to 188,000 but remains the lowest in more than 50 years.

Analysts surveyed by the data firm FactSet forecast 207,000 new applications.

Weekly filings for unemployment benefits are considered representative of layoffs and are close to a real-time indicator of the health of the U.S. job market.