The US economy grew at a 3.8% rate in the second quarter, significantly stronger than previously reported
By: Bryan Mena (CNN)
Looks like imposing tariffs while cutting corporate taxes might have been the right call.
S E E D E D C O N T E N T
Washington — The US economy’s comeback in the second quarter was just revised higher again, and economists estimate that momentum carried on in the third quarter, underscoring the resilience of the world’s largest economy.
Gross domestic product, the broadest measure of economic output, rose at an annualized rate of 3.8% from April through June, the Commerce Department said Thursday in its third and final estimate. That’s significantly higher than the 3.3% rate reported in the second estimate, and well above the 3% initially reported.
GDP was revised higher largely due to new additional data on consumer spending. Personal consumption expenditures rose at an annualized pace of 2.5% in the second quarter, according to the third estimate, up sharply from the second estimate’s 1.6%.
The big difference between the first estimate and the third one is “certainly notable and outside the norm,” Bret Kenwell, US investment analyst at investing platform eToro, told CNN.
“This year’s economic data — especially over the past few months — has been noisy, and economic policy uncertainty has remained elevated throughout 2025,” he said. “With so many moving parts in the GDP report, it’s not surprising that larger-than-expected revisions are showing up, particularly in a year marked by heightened volatility and mixed signals.”
But the economic story of the second quarter remains the same: Falling imports and US consumers who kept on spending helped fuel the rebound during the spring, following a contraction in the beginning of the year when importers stocked up on inventories to get ahead of President Donald Trump’s tariffs, which subtracted from GDP.
The Federal Reserve Bank of Atlanta estimates that GDP continued to power through at a robust pace in the third quarter, forecasting third-quarter GDP to register at a solid 3.3% rate.
“Thursday’s upward GDP revision for the second quarter confirmed that the economy grew at a healthy clip, even as tariff uncertainty reached fever pitch during the quarter,” Paul Stanley, chief investment officer at Granite Bay Wealth Management, wrote in an analyst note Thursday.
“The US economy is resilient and the strong GDP is another indication that we are not at risk of any kind of recession, even with slowing labor market growth,” he said.
Another strong quarter?
The US labor market is slowing and consumer sentiment is declining again but, so far, Americans haven’t cut back on their spending.
That’s key because consumer spending is the lifeblood of the US economy, accounting for about two-thirds of economic output.
Against the odds, retail sales, which comprise a sizable chunk of overall spending, rose 0.6% in August from the prior month, according to Commerce Department data, following July’s 0.6% gain.
The government on Friday releases more comprehensive figures on consumer spending in August, which includes purchases of services, as part of its monthly Personal Consumption Expenditures report.
Still, an increasingly fragile labor market poses a risk to America’s economic engine, especially if layoffs start to climb.
New applications for unemployment benefits remained relatively low last week, the Labor Department said in a separate report released Thursday, but filings by federal workers who’ve been laid off have crept up in recent weeks, and could continue to climb.
In a separate report from the Commerce Department released Thursday, new orders for durable goods rebounded by a strong 2.9% in August, following two consecutive monthly declines, boosted by new orders for aircrafts and parts.
However, excluding transportation equipment, new orders for durable goods were up a more modest 0.4% last month.
New orders for non-defense capital goods excluding aircraft — a key gauge of business investment — rose 0.6% in August, down slightly from July’s 0.8% gain.
Be a good human. Grossly derogatory comments, blatantly inflammatory comments, excessive trolling, mean-spirited taunting and insults, scamming, spamming, and off topic comments may be removed in compliance with the site's Terms of Service and the Code of Conduct. The moderators have the final word.
Can Democrats finally slow the economy by shutting down the government? Or will Democrats only prove that the Federal government really has been a drag on the economy?
Doh!
That would be the dept. Howard Nutlick, Trumps main ballwasher , heads. We have to take everything these people say with a grain of salt.
Yes, believe what the left wing bootlickers say instead.
But you believed the administration that revised jobs during their by a decrease of 818,000 in only a one year timeframe.
Crazy what some believe, huh?
You mean that all the NT expert economists were wrong?
I think those were the same "experts" on how tarriffs would destroy the economy, raise interest, and my favorite, harm international relations.
There is a reason why no one should believe a self perceived "expert" on anything here.
Thank God I didn’t liquidate my 401k and bury it in the back yard.
Woot!
They're also "political experts", "immigration experts", "Mental Health experts", "firearms experts", "legal experts".
And expert Actuarials of everything financial.
The inflation rate is also exceeding the rate of increasing wages, so the result is that people had to dip into their savings or use credit, which does not bode well for the longer term outlook.
Thank your lucky stars it’s nothing like the previous four years …..