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US Economy Grows at Revised 3.3% Rate in Second Quarter, But Underlying Weakness Remains
The U.S. economy rebounded in the second quarter of 2025, growing at a revised annualized rate of 3.3%, according to updated figures from the Commerce Department. This follows a 0.5% contraction in the first quarter.
The upward revision reflects increased business investment and consumer spending. Economist Ryan Sweet of Oxford Economics noted that investments related to artificial intelligence are bolstering the economy and show no signs of slowing down.
However, experts caution that the robust second-quarter growth may be misleading. A significant drop in imports, after businesses stocked up on foreign goods in anticipation of tariffs earlier in the year, artificially inflated the growth figure.
This import decline contributed more than 5 percentage points to the overall growth. EY-Parthenon Chief Economist Gregory Daco highlighted that the first six months of the year averaged only 1.4% growth, indicating weak private sector demand beyond AI investment.
Concerns linger about the overall health of the U.S. economy, fueled by recent slower job growth. July saw only 73,000 new jobs added, below expectations.
This has led investors to anticipate a Federal Reserve interest rate cut in September to stimulate economic activity. The Atlanta Federal Reserve Bank’s GDPNow model currently projects 2.2% growth for the full year.