The U.S. economy recorded a stronger-than-anticipated performance during the second quarter, with gross domestic product rising at an annualized rate of 3.8%, according to updated figures released Thursday by the Bureau of Economic Analysis. This revision marks an increase from the previously reported 3.3% growth, surpassing economists’ expectations that the figure would remain unchanged, as polled by Reuters.
The accelerated expansion was attributed to robust consumer spending and a downswing in imports, as well as a rise in business investment focused particularly on intellectual property, with artificial intelligence driving much of the increase.
In contrast, the first quarter saw GDP shrinking at a revised rate of 0.6%, slightly greater than the previously reported 0.5% contraction, following adjustments by the government to the national accounts data covering the period from early 2020 to the first quarter of 2025.
The initial quarter’s poor showing was blamed on businesses stockpiling imports ahead of President Donald Trump’s broad import tariffs, which lifted the country’s average tariff rate to levels not seen in a hundred years. When import flows normalized in the second quarter, GDP rebounded accordingly.
However, analysts caution the pronounced fluctuations in imports mean that neither the first nor second quarter GDP figures fully capture the underlying trajectory of the U.S. economy. Uncertainty surrounding ongoing trade policy under Trump is expected to dampen momentum in the latter half of the year, with full-year growth projected to slow to around 1.5%.
