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16m ago

U.S. Q2 Growth Revised Up to 3.8% as Fed Signals Caution

Stronger consumer outlays drove the upgrade, complicating the Fed's path on further rate cuts.

A drone view shows Canada's Prime Minister Mark Carney delivering a speech during a visit to the Ambassador Bridge linking Ontario with Michigan, U.S., as part of his Liberal Party election campaign tour, in Windsor, Ontario, Canada, April 26, 2025. REUTERS/Carlos Osorio/File Photo
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Overview

  • The Bureau of Economic Analysis’ final estimate shows real GDP grew at a 3.8% annualized rate in Q2 2025, up from prior 3.3% and 3.0% readings.
  • Personal consumption was revised higher, confirming consumer spending as the main contributor to the stronger headline figure.
  • Analysts note the gain was flattered by a steep drop in imports tied to tariffs and by inventory drawdowns, while private investment fell 13.8%.
  • Real final sales to domestic purchasers, a gauge of underlying demand, rose 2.9% after a full-point upward revision.
  • Federal Reserve officials emphasized caution on further easing following the data, and the Atlanta Fed is tracking roughly 3.3% growth for Q3.