Catenaa, Thursday, August 28, 2025- The US economy rebounded in the second quarter by 3.3% after shrinking in Q1 due to fallout from President Donald Trump’s trade wars, official data said on Thursday.
In an upgrade from its first estimate in July, the Commerce Department said Thursday that US gross domestic product expanded at a 3.3% annual pace from April through June after shrinking 0.5% in the first three months of 2025. The department had initially estimated second-quarter growth at 3%.
The first-quarter GDP drop, the first retreat of the US economy in three years, was mainly caused by a surge in imports, as businesses scrambled to bring in foreign goods ahead of Trump’s tariffs.
That trend reversed as expected in the second quarter: Imports fell at a 29.8% pace, boosting April-June growth by more than 5 percentage points.
The Commerce Department reported that consumer spending and private investment were a bit stronger in the second quarter than it had first estimated.
Consumer spending, which accounts for about 70% of GDP, grew at a 1.6% annual pace, lackluster but better than 0.5% in the first quarter and the 1.4% the government initially estimated for the second.
Even with an upward revision, private investment dropped at a 13.8% annual pace from April through June. That would be the biggest drop since the second quarter of 2020 at the height of the coronavirus pandemic.
A reduction in private inventories cut almost 3.3 percentage points off second-quarter GDP growth.
Spending and investment by the federal government fell at a 4.7% annual clip on top of a 4.6% drop in the first quarter.
