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US economy rebounds a surprisingly strong 3% in the second quarter

By The Associated Press
Posted 8:37AM on Wednesday 30th July 2025 ( 1 day ago )

WASHINGTON (AP) — The U.S. economy expanded at a surprising 3% annual pace from April through June, bouncing back at least temporarily from a first-quarter drop that reflected disruptions from President Donald Trump’s trade wars.

America gross domestic product — the nation’s output of goods and services — rebounded after falling at a 0.5% clip from January through March, the Commerce Department reported Wednesday. The first-quarter drop was mainly caused by a surge in imports — which are subtracted from GDP — as businesses scrambled to bring in foreign goods ahead of Trump’s tariffs.

The bounceback was expected but its strength was a surprise: Economists had forecast 2% growth from April through June.

From April through June, a drop in imports — the biggest since the COVID-19 outbreak — added more than 5 percentage points to growth. Consumer spending registered lackluster growth of 1.4%, though it was an improvement over the first quarter's 0.5%.

Private investment fell at a 15.6% annual pace, biggest drop since COVID-19 slammed the economy. A drop in inventories — as businesses worked down goods they'd stockpiled in the first quarter — shaved 3.2 percentage points off second-quarter growth.

A category within the GDP data that measures the economy’s underlying strength weakened in the second quarter, expanding at a 1.2% annual pace, down from 1.9% from January through March. This category includes consumer spending and private investment but excludes volatile items like exports, inventories and government spending.

Federal government spending and investment fell at a 3.7% annual rate on top of a 4.6% drop in the first quarter.

On his Truth Social media platform, Trump heralded the GDP gain and stepped up his pressure on the Federal Reserve to cut interest rates: "2Q GDP JUST OUT: 3%, WAY BETTER THAN EXPECTED! “Too Late” MUST NOW LOWER THE RATE. No Inflation! Let people buy, and refinance, their homes!''

FILE - A sheet of new $1 bills is seen, Nov. 15, 2017, at the Bureau of Engraving and Printing in Washington. (AP Photo/Jacquelyn Martin, File)
A worker works on the roofing structure of new home under construction, Tuesday, July 15, 2025, in Richardson, Texas. (AP Photo/Tony Gutierrez)
A sign announces a restaurant is hiring workers, Tuesday, July 15, 2025, in Richardson, Texas. (AP Photo/LM Otero)

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