The U.S. gross domestic product (GDP) —the value of all goods and services produced across the economy—rose at a seasonally and inflation adjusted 3.0% annual rate in the second quarter.
The economy returned to growth in the second quarter after contracting in the first, largely due to trade swings.
It followed a first quarter where GDP shrank at a 0.5% annual rate as businesses loaded up on imports to get ahead of the Trump administration’s anticipated tariffs.
Over the first six months of the year, the economy grew, but at a much more modest pace than last year: at a 1.2% annual rate. That was slower than 2.5% growth in 2024, measured from the fourth quarter of the prior year, and comes as the economy has grappled this year with stop-start tariff policies, a nosedive and partial recovery in consumer sentiment and worker deportations.
President Trump welcomed the 3% reading and called for the Federal Reserve to lower interest rates in a post on Truth Social. “No Inflation! Let people buy, and refinance, their homes!” he said.
Consumer spending increased at a 1.4% pace, picking up from the first quarter as a steady labor market underpinned households’ spending power. But consumer spending was offset by weaker business spending.
An important measure of economic health showed that combined demand from business and consumers weakened. That measure, called final sales to private domestic purchasers, rose at a 1.2% rate in the second quarter, down from 1.9% in the prior quarter. The measure carves out the more volatile government, inventory and international trade data.
Growth in business investment eased, dragged down by weaker investment in buildings and equipment. The housing sector, hard-hit by high borrowing costs, remained a drag on the economy.
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