US economic growth in the second quarter fell short of expectations, even as consumer spending rebounded and business investment remained robust.

The Commerce Department's Bureau of Economic Analysis released preliminary estimates on Thursday, showing that inflation-adjusted gross domestic product grew at an annualized rate of 1.5% in the second quarter.

A decline in net exports masked the underlying strength of demand. Net export data typically experiences significant quarterly fluctuations. Consumer spending, which accounts for roughly two-thirds of economic activity, grew at an annualized rate of 3.2%. Business investment continued to grow rapidly, fueled by companies competing to invest in artificial intelligence.

Meanwhile, driven by lower gasoline prices, the Fed's preferred inflation gauge, the Personal Consumption Expenditures (PCE) price index, fell 0.1% month-over-month in June. The core PCE price index, which excludes food and energy, rose 0.1% month-over-month.