U.S. fiscal policy made a small negative contribution to growth in the second quarter of 2026. The fiscal impact measure translated changes in taxes and spending into their effect on aggregate demand and real GDP growth.
The headline figure was a subtraction of 0.2 percentage points from GDP growth, while real GDP increased at an annual rate of 1.5 percent in the quarter. The result points to a fiscal stance that was not sharply contractionary but no longer clearly supportive.
The drag came mainly from public purchases. Real federal spending on goods and services subtracted 0.4 percentage points, and state and local spending subtracted 0.1 percentage points from growth.
Other factors moved in the opposite direction. Underlying taxes, tax cuts in the One Big Beautiful Bill Act, transfers, tariffs and supply-side effects added about 0.3 percentage points.
The near-term outlook is moderately restrictive for the rest of 2026 and more restrictive in 2027 if government purchases remain weak and earlier supply-side support turns negative. The measure tracks direct fiscal effects, not fiscal multipliers.
