❓WHAT HAPPENED: The U.S. economy grew at a 3% annual rate in the second quarter of 2025, bolstered by a sharp drop in imports following a tariff-related surge earlier in the year.
👤WHO WAS INVOLVED: President Donald Trump’s administration, U.S. businesses and consumers, and the Federal Reserve.
📍WHEN & WHERE: Data reflects the second quarter of 2025, with the Commerce Department releasing its report on July 30.
🎯IMPACT: Higher consumer confidence, though establishment economists say growth will slow in the coming months.
The U.S. economy grew at a seasonally adjusted annual rate of 3% in the second quarter of 2025, according to the Commerce Department’s July 30 report. This figure exceeded economists’ forecast of 2.4%, as surveyed by Bloomberg.
The growth was largely attributed to a 30.3% drop in imports, reversing a 37.9% surge in the first quarter. The earlier spike was driven by businesses stockpiling foreign goods ahead of President Donald Trump’s tariffs, which led to a contraction in GDP during the first quarter.
Consumer spending and business investment also increased.
Establishment economists, however, project growth to slow further in the second half of the year, blaming Trump’s tariffs which fuelled the current surge and have already helped raise government revenue.
Despite this GDP performance, the Federal Reserve is expected to maintain its current interest rates, focusing instead on monitoring inflation and labor market trends. Futures markets anticipate a possible rate cut in mid-September.
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