Gross domestic product increased at an upwardly revised 3.8% annualised rate last quarter
[WASHINGTON] The US economy grew faster than previously thought in the second quarter, pumped up by an ebb in imports and a pickup in consumer spending, but momentum appears to have since slowed.
Gross domestic product increased at an upwardly revised 3.8 per cent annualised rate last quarter, the Commerce Department’s Bureau of Economic Analysis (BEA) said in its third GDP estimate on Thursday (Sep 25). The economy was initially reported to have grown at a 3.3 per cent pace in the second quarter.
Economists polled by Reuters had expected GDP growth would be unrevised at a 3.3 per cent rate. Growth last quarter was also supported by businesses boosting investment in intellectual property products, mostly artificial intelligence.
The government revised the national accounts data from the first quarter of 2020 through the first quarter of 2025. The economy contracted at a 0.6 per cent pace in the first quarter, revised slightly down from the previously reported 0.5 per cent pace of decline.
A front-loading of imports as businesses rushed to beat President Donald Trump’s sweeping import duties, which boosted the nation’s average tariff rate to its highest level in a century, depressed GDP in the January-March quarter. GDP snapped back last quarter as the flow of foreign goods eased.
Both the first- and second-quarter GDP readings are not a true reflection of the economy’s health because of the wild swings in imports. Economists expect a tepid second half because of the lingering uncertainty from trade policy, which would limit economic growth to about 1.5 per cent for the full year.
SEE ALSO
When measured from the income side, the economy grew at a downwardly revised 3.8 per cent rate in the second quarter. Gross domestic income (GDI) was initially estimated to have increased at a 4.8 per cent pace. GDI grew at a 1.0 per cent rate in the first quarter, revised up from the previously reported 0.2 per cent pace.
The average of GDP and GDI, also referred to as gross domestic output and considered a better measure of economic activity, grew at a 3.8 per cent rate. That was slight downgrade from the 4.0 per cent pace estimated last month. Gross domestic output grew at a 0.2 per cent rate in the first quarter rather than contracting at a 0.1 per cent pace as reported last month. REUTERS
