US economy expands at 3.3% revised rate in second quarter
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The news: The US economy expanded at a faster pace than anticipated in the second quarter, as investment and consumer spending were revised up.
The numbers: Real US GDP was revised up 0.3 percentage points from the advanced estimate published by the Bureau of Economic Analysis (BEA) in July, increasing at a 3.3% annualised pace.
Business investment expanded at a 5.7% pace, stronger that the 1.9% increase initially reported and reflected an upward revision to investment in software and transportation equipment.
The context; The BEA explained that the upturn in real GDP in the second quarter primarily reflected a downturn in imports and an acceleration in consumer spending that were partly offset by a downturn in investment.
The GDP turnaround came after a contraction in Q1, the first since 2022, as companies scrambled to import goods before Trump's trade tariffs kicked in.
The US’ gross domestic income, a separate gauge of economic activity, climbed 4.8% in Q2, compared with a 0.2% increase the prior quarter.
The BEA data also showed that US corporate profits rose 1.7% in the second quarter after declining the previous quarter. Corporate profits are being watched closely as US companies assess how significantly to raise prices in response to tariff-induced cost increases.
The source: Bureau of Economic Analysis
