Shoppers hold Macy’s bags outside the company’s flagship store in the Herald Square area of New York, USA, on Tuesday, July 15th, 2025.
Alan Chin | Bloomberg | Getty Images
The US economy grew faster than the pace of thinking in the second quarter as consumers and businesses were opposed to tariff volatility.
Gross domestic product rose at an annual pace of 3.3% from April to June, with the Commerce Department on Thursday reporting in its second estimate of the most comprehensive measure of economic activity. Reading was superior to the initial 3.0% estimate and the 3.1% Dow Jones consensus prediction.
Consumer spending rose 1.6% compared to the initial 1.4% estimate, which helped increase the number that rose 1.6%.
Importantly, the measure known as the final sale to private domestic buyers rose 1.9% from the previous figure 1.2%. Federal Reserve officials are looking closely at the indicators as a sign of demand and sales focused on activities within the US borders, a particularly important measure, given the uncertain impact of President Donald Trump’s tariffs.
GDP numbers also reflect the unusual effects of tariffs related to trade numbers.
Imports subtracting from GDP fell 29.8% in the quarter after companies stockpiled ahead of Trump’s April 2nd release of “liberation date.” This figure was slightly lower than the previous estimate of 30.3%.
At the same time, exports added to GDP fell by 1.3% compared to previous estimates of -1.8%. Take the numbers together, and net exports added nearly 5% points to Q2 total.
In the first half of the year, GDP grew by around 2.1%, or averaged over 1% per quarter. The economy signed 0.5% in the first quarter, mainly due to the impact of the import rush.
“The good news is that consumption has risen higher than previously thought. Americans continue to spend despite tariffs and uncertainty despite the slower pace than in the past few years.” “Now, the economy is likely to remain in this slow speed mode, with spending and growth rates of around 1.5%, and tariffs will be more prominent among American consumers.”
According to the Atlanta Federal Government’s GDPNOW scale, the economy grew at a 2.2% rate in the third quarter, as data from the first few months are mostly listed in the book.
Inflation-related estimates were largely unchanged from the initial reading. Core personal consumption expenditure prices, excluding volatile food and energy categories, rose 2.5%, not changing from the previous figures, but in line with the Fed’s inflation target, the headline PCE price index fell to 2%.
