The US economy’s rebound in the second quarter was stronger than previously reported, and signs suggest momentum carried into the third quarter, highlighting the resilience of the world’s largest economy.
The Commerce Department said Thursday that gross domestic product rose at the rate of 3.8% from April through June, the third and final estimate.
This revised figure exceeds both the 3.3% second estimate and the initial 3% reading.
The upward revision reflected a combination of lower imports and continued consumer spending, which offset the early-year drag caused by importers stockpiling inventories ahead of tariffs.
Following a contraction in the first quarter, these factors helped the economy recover more quickly than expected.
The Federal Reserve Bank of Atlanta projects that GDP maintained a robust pace in the third quarter, with the government scheduled to release its first official estimate next month.
The revised figures come a week after the Federal Reserve lowered borrowing costs for the first time this year, citing a notable slowdown in the labour market.
Policymakers have indicated that further cuts are possible, though they stressed decisions will hinge on incoming economic data.
In bond markets, short-term US government debt—seen as most sensitive to shifts in monetary policy—fell in price on Thursday, pushing yields higher.
The two-year Treasury yield rose 0.07 percentage points to 3.67% in recent trading.
Drivers of growth
The Bureau of Economic Analysis said the increase in second-quarter GDP was driven mainly by a decline in imports, which are a subtraction in the calculation of GDP, along with stronger consumer spending.
These gains were partly offset by weaker investment and exports.
Real final sales to private domestic purchasers, a measure that combines consumer spending and fixed private investment, were revised up by one percentage point to show a 2.9% gain in the quarter.
The rebound followed a contraction in the first quarter, which was revised down to a 0.6% decline from the previously reported 0.5%. That leaves growth for the first half of 2025 at an annualised pace of about 1.6%.
According to the BEA, the second-quarter improvement reflected a pullback in imports and stronger consumer demand, while investment continued to weigh on overall growth.
This is a developing story.
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