A recent analysis shows that the United States economy expanded 3.3% in Q2. This was a growth that was stronger than which many thought. Gross Domestic Product rose 3.3% in the quarter 2 period from April to June. The U.S. consumer spending rose to 1.6% with the initial estimate being 1.4%, this helped pushed the higher number. Critically, a measure called final sales to to private domestic rose to 1.9%, this was an increase from the previous number of 1.2%. The Federal Reserve watches this closely from the indication of demand and sales that occur within the United States borders, this is extremely important taking in the consideration of the uncertainty impact that Trump's tariffs create.
In the first half of this year GDP has grown 2.1%, which is about a 1% increase in each quarter. The economy contracted 0.5% in the first quarter which was largely impacted by the rush of imports. Although, there is some good news. Consumption of American's is higher than what was originally thought to be. American's are still willing to spend regardless of the uncertainty and tariffs. Heather Long, the chief economists at the Navy Federal Credit Union stated, “Going forward, the economy is likely to stay in this slower speed mode with spending and growth around 1.5% as the tariffs become more visible to American consumers.”
With the first couple months of the third quarter in the books the economy is growing at a 2.2% pace in Q3.
Source: https://www.cnbc.com/2025/08/28/us-economy-grew-3point3percent-in-q2-growth-was-stronger-than-initially-thought.html
Posted by: Chanden Lee at 8/31/2025 12:24:00PM
2 comments:
It's encouraging to see GDP growth come in higher than expected, especially given the significant role consumer spending plays. At the same time, tariffs could become a drag if they start to raise prices more noticeably for households. I wonder if the steady pace in Q3 will hold up, or if we'll begin to see slower growth once the full effects of the tariffs are felt in consumer goods.
The 3.3% growth is very encouraging, considering the possible effects the tariffs might have on prices for households in the near future. This growth might not be sustainable as it seems growth is dropping to around 2% in quarter 3, which could be affected by tariffs weighing more heavily on consumer prices.
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