The U.S. economy has rebounded this spring. Reports are indicating a sign of 3.3% annual rate in the second quarter. According to the Commerce Department the rate was initially forecast at 3% and it had previously declined by 0.5% in the first quarter. The Associated Press also reported this latest update.
According to AP News the big reason for the rebound was a sharp 29.8% drop in imports, as businesses had rushed to stock up ahead of President Trump’s tariffs. That helped boost the overall GDP by more than five percentage points.
Consumer spending also improved, growing at 1.6% (better than the earlier 1.4% estimate), though private investment fell 13.8%, marking the largest decline since the 2020 pandemic.
Reuters reported that business investment, especially in AI and intellectual property rose more than initially, while economists warned that the bumper growth may be temporary and tied to trade fluctuations.
According to Reuters, “Stephen Stanley, the chief U.S. economist, said for the second quarter in a row, the headline GDP figures are not going to offer an accurate view of the underlying picture, the ripple effects from the Trump administration’s unpredictable tariffs strategy spread widely through the economy. The primary impact was to create caution in the corporate community.”
Now many experts are warning that underlying demand remains weak, and are predicting slower growth amid business uncertainty and investment activity in US.
