The gross domestic product rose in the second quarter, adding more pressure on Powell to lower interest rates. File Photo by John Angelillo/UPI | License Photo
The U.S. economy grew stronger than expected in the second quarter of 2025, according to the advance estimate released Wednesday by the United States Bureau of Economic Analysis.
Real gross domestic product increased at an annual rate of 3% in the second quarter of 2025, according to the advance estimate released by the BEA. In the first quarter, real GDP decreased 0.5%.
The GDP is a sum of goods and services produced across the U.S. economy. It’s a key indicator of economic growth. Real GDP is the GDP adjusted for inflation.
The increase in real GDP in the second quarter mostly reflected a decrease in imports, which are a subtraction in the calculation of GDP, and an increase in consumer spending. These movements were partly offset by decreases in investment and exports, the BEA said.
Markets showed little reaction to the announcement.
“The word of the summer for the economy is ‘resilient,'” Heather Long, chief economist at Navy Federal Credit Union, told CNBC. “The consumer is hanging in there, but still on edge until the trade deals are done.”
President Donald Trump reacted to the report with more demands for lower interest rates from the Federal Reserve.
“2Q GDP JUST OUT: 3%, WAY BETTER THAN EXPECTED!” he posted on Truth Social. “‘Too Late’ MUST NOW LOWER THE RATE. No Inflation! Let people buy, and refinance, their homes!” Trump’s nickname for Fed Chair Jerome Powell is “Mr. Too Late.”
Imports rose in the first quarter as companies tried to get ahead of the tariffs announcement on April 2, which Trump called “liberation day.”
Real final sales to private domestic purchasers, the sum of consumer spending and gross private fixed investment, rose 1.2% in the second quarter, compared with an increase of 1.9% in the first quarter.
The price index for gross domestic purchases rose 1.9% in the second quarter, compared with an increase of 3.4% in the first quarter. The personal consumption expenditures price index increased 2.1%, compared with an increase of 3.7%. Excluding food and energy prices, the PCE price index rose 2.5%, compared with an increase of 3.5%.
