- Real GDP increased at an annualized rate of 3% in the second quarter, more than expected.
- That reverses the shrinking economy in the first quarter, but tariffs cloud future performance.
- The report is just one of several this week that highlight how the economy is doing.
US real gross domestic product grew at an annualized rate of 3% in the second quarter, surpassing the forecast of 2.5% and a sharp rebound from the first quarter’s decline.
“Compared to the first quarter, 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 Bureau of Economic Analysis said.
Other releases beyond Wednesday’s Bureau of Economic Analysis report indicate how the economy is doing. The Federal Reserve’s Beige Book covering economic conditions between late May and early July said five of the 12 Fed districts had slight or modest economic gains and another five reported flat activity, compared to three with slight economic growth and three with no change in activity in the previous report.
The Beige Book also said there was a slight improvement in employment. Analysts and economists told Business Insider that the labor market is good if you have a job, and is not so great if you’re a job seeker.
The economy’s performance is still mixed and uncertain, especially amid tariff decisions. A rise in imports contributed to the fall in real GDP in the first quarter as businesses prepped for tariffs.
President Donald Trump’s widespread tariffs are supposed to start on August 1 after a few pauses. The US and EU announced a trade deal on Sunday, including a 15% tariff rate on goods imported from the EU with some exceptions, Europe purchasing billions of dollars in US energy, and eliminating tariffs on US industrial goods.
The Federal Reserve will announce Wednesday afternoon its newest decision on interest rates, which economists and analysts expect to be held steady for the fifth straight decision. More data will be out this week, including the jobs report from the Bureau of Labor Statistics and monthly consumer spending from the Bureau of Economic Analysis.
This is a developing story. Please check back for updates.
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