The U.S. economy expanded at a 3.3% annualized rate during the second quarter of the year, according to updated figures released by the Commerce Department. This marks an upward revision from the initial estimate of 3.0% and surpasses the 3.1% forecast expected by analysts. n nConsumer spending, a key driver of growth, increased by 1.6%, higher than the previously reported 1.4%. A closely watched indicator, final sales to private domestic purchasers, climbed to 1.9% from 1.2%, signaling resilient domestic demand. Federal policymakers monitor this metric carefully, especially amid uncertainties tied to trade policy shifts. n nTrade dynamics significantly influenced the quarter’s GDP. Imports—subtracted from GDP calculations—plunged by 29.8% as businesses stocked up ahead of former President Donald Trump’s April 2 tariff announcement, slightly less than the earlier estimate of 30.3%. Exports declined by 1.3%, an improvement over the prior -1.8% estimate. Together, net exports added nearly 5 percentage points to overall growth. n nFor the first half of the year, GDP growth averaged about 2.1%, or just over 1% per quarter. The first quarter saw a 0.5% contraction, largely due to the surge in imports. n nHeather Long, chief economist at Navy Federal Credit Union, observed that consumer resilience remains evident despite economic headwinds. She noted that spending continues, though at a more moderate pace than in previous years. Looking ahead, she anticipates growth to stabilize around 1.5%, as tariff effects become more apparent to households. n nCurrent tracking models, including the Atlanta Fed’s GDPNow, suggest a 2.2% growth rate for the third quarter. n nInflation metrics remained stable. Core personal consumption expenditures (PCE), which exclude food and energy, held at a 2.5% increase. The overall PCE price index dipped slightly to 2%, aligning with the Federal Reserve’s long-term inflation target. n— news from CNBC
— News Original —nU.S. economy expanded 3.3% in Q2, with growth even stronger than initially thoughtnThe U.S. economy grew at an even faster than thought pace in the second quarter as consumers and businesses held up against tariff volatility. n nGross domestic product rose at a 3.3% annualized pace in the April-through-June period, the Commerce Department reported Thursday in its second estimate for the most encompassing measure of economic activity. The reading was better than an initial 3.0% estimate as well as the 3.1% Dow Jones consensus forecast. n nConsumer spending helped push the number higher, rising by 1.6% compared to an initial 1.4% estimate. n nImportantly, a measure called final sales to private domestic purchasers jumped 1.9%, up from the previous figure of 1.2%. Federal Reserve officials watch that metric closely as an indication of demand and sales that focuses on activity within U.S. borders, an especially important measure considering the uncertain impact of President Donald Trump ‘s tariffs. n nThe GDP number also reflected the unusual impact of the tariffs as they related to trade numbers. n nImports, which subtract from GDP, tumbled 29.8% in the quarter after companies stockpiled ahead of Trump ‘s April 2 “liberation day” announcement. The figure was a bit less than the previous estimate of 30.3%. n nAt the same time, exports, which add to GDP, fell by 1.3%, compared to the previous estimate of -1.8%. Taking the figures together, net exports added nearly 5 percentage points to the Q2 total. n nFor the first half of the year, GDP has grown about 2.1%, or an average of a little more than 1% per quarter. The economy contracted 0.5% in the first quarter, largely due to the impact of the import rush. n n”The good news is consumption came in higher than previously thought. Americans are continuing to spend despite the tariffs and uncertainty, albeit at a slower pace than past years,” said Heather Long, chief economist at Navy Federal Credit Union. “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.” n nWith the first months ‘ data mostly in the books, the economy is growing at a 2.2% pace in the third quarter, according to the Atlanta Fed ‘s GDPNow measure. n nInflation-related estimates were little changed from the initial reading. Core personal consumption expenditures prices, which exclude the volatile food and energy categories, rose 2.5%, unchanged from the prior figure, while the headline PCE price index edged lower to 2%, in line with the Fed ‘s inflation goal.