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21m ago

U.S. Q2 Growth Revised to 3.8% on Import Drop and Stronger Spending

OECD warnings alongside weaker labor revisions cast doubt on the rebound's durability.

A woman carries shopping bags in Manhattan in New York City, U.S., August 11, 2025. REUTERS/Eduardo Munoz
FILE - The U. S. Department of Commerce building is seen in Washington, Dec. 7, 2024. (AP Photo/Jose Luis Magana, file)
A shopper shops at a Target in Arlington Heights, Ill., on Sept. 23, 2025.

Overview

  • BEA’s third and final estimate lifted second‑quarter GDP to a 3.8% annualized rate, up from 3.3% previously and 3.0% initially.
  • The bureau said the gain primarily reflected a decrease in imports, which subtract from GDP, and a stronger 2.5% pace of consumer spending.
  • The first quarter was revised to a 0.6% contraction after businesses front‑loaded imports ahead of tariffs, leaving headline growth volatile across the first half.
  • Investment was mixed, with declines in private investment and inventories offset in part by intellectual‑property outlays tied to artificial intelligence.
  • OECD projected U.S. growth to slow to 1.8% in 2025 and 1.5% in 2026 as average tariffs near 19.5%, while a softer jobs picture and a 911,000-job revision helped prompt the Fed’s recent rate cut; the Atlanta Fed pegs Q3 growth around 3.3%.