U.S. Real Gross Domestic Product (GDP) growth was even stronger than initially reported, the U.S. Bureau of Economic Analysis (BEA) announced Thursday.
Annualized inflation-adjusted (“real”) GDP growth was revised up 0.3 percentage point to 3.3% in BEA’s second estimate for the second quarter, improving on the expectation-exceeding rebound from the first quarter’s 0.5% decline. The upward revision was the result of higher estimates of investment and consumer spending that were partly offset by a downward revision to government spending and an upward revision to imports.
Real final sales to private domestic purchasers, the sum of consumer spending and gross private fixed investment, increased 1.9 percent in the second quarter, revised up 0.7 percentage point from the previous estimate.
The first quarter drop in “real” (inflation-adjusted) GDP was largely due to a spike in imports (which reduce GDP) as consumers tried to get ahead of any price increases caused by President Donald Trump’s threat of levying reciprocal tariffs on countries charging exorbitant tariffs on U.S. goods.
Since then, Trump has negotiated trade deals with multiple countries, most recently with the United Kingdom, easing fears of tariff-induced inflation.
