Associated Press Economics Writer Paul Wiseman
WASHINGTON (AP) – The US economy expanded at an astounding 3% annual pace from April to June, temporarily bounced back from first quarter drops, reflecting at least President Donald Trump’s disruption from the trade war.
The US Gross Domestic Product – the country’s production of goods and services – was rebounded after falling at 0.5% clips from January to March, the Commerce Department reported Wednesday. The first quarter decline was primarily driven by a surge in imports (deducted from GDP) as businesses rushed to bring in foreign goods ahead of Trump’s tariffs.
A bounceback was expected, but its strength was surprising. Economists projected growth of 2% from April to June.
From April to June, the decline in imports (the largest since Covid-19 outbreak) added 5% points to growth. Consumer spending improved at 0.5% in the first quarter, but registered an inactive growth of 1.4%.
Private investment has declined at an annual pace of 15.6%, the biggest decline since Covid-19 denounced the economy. The decline in inventory shaved 3.2 points from second quarter growth as companies reduced products they had stocked in the first quarter.
Categories in GDP data, which measure the underlying strength of the economy, weakened in the second quarter, expanding at an annual pace of 1.9% to 1.2% from January to March. This category includes consumer spending and private investment, but excludes unstable items such as exports, inventory and government spending.
Federal spending and investment fell at an annual rate of 3.7%, plus a 4.6% decline in the first quarter.
On his true social media platform, Trump told GDP profits and strengthened pressure on the Federal Reserve to cut interest rates.
Original issue: July 30th, 2025, 8:51am EDT
