US economic growth was more robust than initially anticipated in the second quarter, registering a 3.3% increase
The U.S. economy grew at a robust 3.3% annualized pace in the April-through-June period, according to the latest GDP figures released by the Commerce Department. This growth was better than the initial 3.0% estimate and the 3.1% Dow Jones consensus forecast.
The growth in Q2 was largely driven by a surge in net exports and a jump in final sales to private domestic purchasers. Net exports added nearly 5 percentage points to the Q2 GDP total, while a measure called final sales to private domestic purchasers jumped 1.9%.
The strong growth in Q2 came after a contraction of 0.5% in the first quarter, largely due to an import rush. Imports tumbled 29.8% in the quarter after companies stockpiled ahead of President Donald Trump's April 2 "liberation day" announcement. The figure for imports was a bit less than the previous estimate of 30.3%.
Core personal consumption expenditures prices, a key measure of inflation, rose 2.5% in the second quarter. However, inflation-related estimates were little changed from the initial reading, with the headline PCE price index edging lower to 2%. Consumer spending rose by 1.6% compared with an initial 1.4% estimate.
Looking ahead, the economy is expected to grow at a 2.2% pace in the third quarter, according to the Atlanta Fed's GDPNow measure. It's worth noting that the GDP number reflected the unusual impact of President Trump's tariffs on trade numbers.
Federal Reserve officials watch the GDP figure closely as an indication of demand and sales within U.S. borders. The economy grew about 2.1% for the first half of the year, providing a solid foundation for continued growth in the second half.
However, it's important to note that no further information about Microsoft, Tesla, or BYD, or artificial intelligence was provided in the given paragraphs.
In summary, the U.S. economy showed a strong rebound in the second quarter, growing at a 3.3% annualized pace. This growth was driven by strong net exports and final sales to private domestic purchasers, following a contraction in the first quarter due to an import rush. Inflation remained relatively stable, with core personal consumption expenditures prices rising 2.5%. The economy is expected to continue growing at a steady pace in the third quarter.
