But the housing crunch hit hard, with residential investment falling at a 26.4% annual rate, enough to cut about 1.4 percentage points from the GDP growth rate. The economic picture would look worse still if not for a decline in the trade deficit that bumped up growth by about 2.8 percentage points. Final sales of private domestic purchases—a measure of underlying demand that excludes the effects of swings in trade, inventory levels and government spending—grew at just a 0.1% annual rate. The private-demand figure grew at a 2.1% rate in the first quarter and 0.5% in the second, which helps underscore why, even though GDP contracted for two quarters in a row, the recession callers at the National Bureau of Economic Research weren’t about to declare a U.S. downturn.

None of this was unexpected. Even if economists didn’t nail the GDP growth figure, they got the contours of the report more-or-less right. Some thought private demand might contract, so the fact that it eked out a gain counts as a plus.

With limited data in hand, it is hard to know how GDP in the current quarter might pan out. It does seem highly unlikely that trade will provide as big a boost, or, considering how the dollar has kept strengthening while overseas economies keep deteriorating, any boost at all. With the average rate on a 30-year mortgage now above 7%, housing seems likely to keep exerting a significant drag on the economy. Companies, eyeing substantial declines in their share prices and a Federal Reserve that aims to keep on raising rates, might not be so keen on increasing capital spending.

The most important factor for how the economy does will probably be the degree to which Americans are willing to keep spending. As of now, we know the labor market is in good shape—on Thursday the Labor Department reported, once again, that jobless claims remained low in the latest week. Household finances look good as well, with many people hanging on to much of the savings that accrued to them during the early stages of the pandemic.

So it might be that through the end of the year GDP, or at least underlying demand, can continue to grow. After that the economy’s course probably depends on whether inflation cools to the point the Fed decides it can slow its pace of tightening. No aspect of the economy, even Americans’ penchant for spending, can withstand higher rates forever.

Write to Justin Lahart at Justin.Lahart@wsj.com