The U.S. economy grew at a faster rate than previously thought in the second quarter after the Commerce Department released its first revision of real gross domestic product (GDP) growth for the latest quarter.
The Bureau of Economic Analysis (BEA) released its second estimate of Q2 GDP, which showed the economy grew at a 3.3% rate. That figure was faster than the 3.1% estimate of economists polled by LSEG, and above the Commerce Department’s initial Q2 GDP estimate of 3%.
According to the BEA, the revision stemmed primarily from upward revisions to investment and consumer spending that were partly offset by downward revisions to government spending as well as an upward revision to imports.
The growth in Q2 follows a GDP contraction of 0.5% in the first quarter, which leaves GDP growth in the first half of 2025 at an annualized rate of about 1.4%.
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The BEA will release its final estimate of Q2 GDP on Sept. 25, which could further revise the economic growth figure.
EY-Parthenon chief economist Gregory Daco warned that, “While the U.S. economy grew at an upwardly revised annualized rate of 3.3% in Q2 2025, the strength was largely a mirage, reflecting a sharp decline in imports after businesses accelerated their purchases in response to tariffs in Q1.”
“The U.S. economy only expanded at a muted 1.4% average pace in H1, revealing soft underlying private sector demand outside of the AI-driven investment boom,” Daco added.
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“The upward revisions to second quarter economic growth raises the bar for the third quarter,” said LPL chief economist Jeffrey Roach.
“Slowing job growth indicates the economy will not keep up with the above-trend growth from the previous quarter,” Roach explained. “Economic growth will likely flatline in the third quarter. Softer growth in Q3 will add fuel to those calling for rate cuts.”
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Following the release of the revised Q2 2025 GDP figures, the Commerce Department announced that it has begun posting its GDP data on the blockchain – marking the first time a federal agency has published economic statistical data on the blockchain.
The Commerce Department’s BEA on Friday will release the July personal consumption expenditures (PCE) index, which is the Federal Reserve’s preferred inflation gauge.
The July PCE data, along with the release of the August jobs report and the consumer price index (CPI) inflation data, will help inform the Federal Reserve’s interest rate cut decision at the central bank’s mid-September monetary policy meeting.
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