A big upward revision for GDP, was a 3.8% annual rate (up from 3.0% in the advance estimate). For H1 GDP up at a 1.6% annual rate.
The biggest change was consumption which was 2.5% annual rate (up from 1.4% in the advance). Business fixed investment strong, residential weak. pic.twitter.com/ZW8bdPMjnX
— Jason Furman (@jasonfurman) September 25, 2025
The US economy expanded significantly more than initially expected over a recent three-month period, suggesting robust growth despite uncertainty set off by President Donald Trump’s policies. Federal government data released on Thursday showed that the US economy grew at an annualized rate of 3.8% in the second quarter, surpassing the government’s previous estimates of 3.3% and an initial estimate of 3%. The figure marks a sharp acceleration from an annualized contraction of -0.5% in the first quarter of 2025.
However, the data taken together still indicates an economic slowdown over the first half of 2025. A boost in consumer spending helped propel the economic surge over the three months ending in June.
The U.S. economy is on the rise—and Main Street continues to fuel its growth 🇺🇸https://t.co/zCSXUD0ir2
— House Committee on Small Business (@HouseSmallBiz) September 25, 2025
Consumer spending, which accounts for about two-thirds of US economic activity, is a key bellwether for the nation’s economic outlook.
To some degree, however, Trump’s tariffs have blurred the GDP findings.
"3.8% growth — the biggest in years," says @SecScottBessent on Q2 GDP.
"Strong growth, low inflation, real wage gains… Small business optimism under President Trump last week hit a multi-year high. Main Street is BACK under President Trump." pic.twitter.com/aWqTW9hzJa
— Rapid Response 47 (@RapidResponse47) September 25, 2025
The government’s GDP formula subtracts imports in an effort to exclude foreign production from the calculation of total goods and services. Changes in the reading on this account reveal neither underlying economic weakness nor strength.
.@cherylcasone on the second quarter GDP: "A gain of 3.8%… a STRONG ECONOMY. Consumer spending — strong… But that GDP number, it's very rare to see that. That was a GOOD number." pic.twitter.com/eg2YPPyx6D
— Rapid Response 47 (@RapidResponse47) September 25, 2025
The GDP fell over the first three months of the year, largely due to a surge in imports as firms stockpiled inventory to avoid far-reaching tariffs.
Revised GDP shows robust growth
Conversely, a drop-off in imports over the second quarter may have inflated the GDP figure.
“The GDP growth primarily reflected a decrease in imports, which are a subtraction in the calculation of GDP,” the US Commerce Department said on Thursday. The fresh data arrives at a wobbly moment for the nation’s economy. A jobs report earlier this month indicated a sharp decrease in hiring in August, extending a lackluster period for the labor market.
Meanwhile, a revision of previous hiring estimates revealed that the US economy added far fewer jobs in 2024 and early 2025 than previously estimated, deepening concern about the health of the job market. The weak jobs data has raised alarm among some analysts, who noted that the US economy may be slipping toward a recession. Despite the labor market’s recent struggles, the economy has largely averted the type of widespread job losses that often accompany a downturn.
In response, the Federal Reserve cut interest rates last week in an effort to boost hiring. The Federal Open Market Committee (FOMC) projected two additional quarter-point rate cuts for the remainder of 2025. This latest adjustment in economic policy signals the Fed’s ongoing commitment to stabilizing the economy amidst mixed indicators of economic health.