Second-quarter growth revised up to 3.3%
The U.S. economy expanded at a stronger pace than initially reported in the second quarter of 2025, with new data showing an annualized growth rate of 3.3%, up from the prior estimate of 3%. According to the Commerce Department’s latest figures, consumer resilience and increased business investment fueled the improved performance.
The revised GDP numbers indicate a notable recovery from the 0.5% contraction recorded in the first quarter. Adjusted for inflation and seasonal factors, the data suggests that American households and companies maintained spending momentum despite geopolitical uncertainty and tariff impacts stemming from President Trump’s trade policies.
Consumers and businesses drive upward revision
Consumer spending, which accounts for nearly two-thirds of the economy, was revised up to a 1.6% growth rate for the April–June period, compared to the previously estimated 1.4%. Meanwhile, nonresidential fixed investment — a key gauge of business confidence — surged to 5.7%, far exceeding the earlier reading of 1.9%.
The boost in business activity was largely driven by investments in intellectual property products, underlining the growing role of technology and innovation in economic output.
Underlying momentum remains fragile
Despite the headline growth, economists caution that the broader economic picture remains mixed. Real final sales to private domestic purchasers, a closely watched indicator of domestic demand, was revised up to 1.9%. While higher than the previous 1.2%, analysts note it still reflects only moderate growth.
“With the initial brunt of the tariff shock behind us and the economy losing momentum, we expect to see sub-1% GDP growth in the second half of the year,” said Oren Klachkin, an economist at Nationwide. He warned that a weakening job market and lingering inflation could dampen consumer activity through the remainder of 2025.
Labor market slowdown adds uncertainty
Job creation has softened notably in recent months. Between May and July, the U.S. saw the slowest pace of job growth outside the pandemic since 2009. This trend is raising red flags for policymakers at the Federal Reserve, who are closely monitoring labor market conditions as they weigh future interest rate decisions.
While second-quarter data suggests short-term strength, concerns remain about the sustainability of growth. Analysts expect that slowing employment and global trade tensions could limit economic expansion into the final months of the year.
