U.S. economy expanded 3.3% in Q2, with growth even stronger than initially thought

The U.S. economy expanded more quickly than anticipated in the second quarter as both consumers and businesses weathered the turbulence from tariffs.

Gross domestic product grew at a 3.3% annualized rate from April through June, according to the Commerce Department’s second estimate released Thursday. That marked an upward revision from the initial 3.0% reading and topped the 3.1% pace expected by economists surveyed by Dow Jones.

Consumer spending was a major contributor, rising 1.6% compared with the prior estimate of 1.4%. Another closely watched measure, final sales to private domestic purchasers—which strips out trade and inventories to focus on underlying demand—was revised sharply higher to 1.9% from 1.2%. Federal Reserve officials monitor this figure closely, especially amid the uncertain effects of President Donald Trump’s tariffs.

Trade flows also reflected unusual distortions from tariff-related behavior. Imports, which subtract from GDP, plunged 29.8% in the quarter after businesses rushed to stockpile goods ahead of Trump’s April 2 “liberation day” tariff announcement. That decline was slightly less steep than the previously reported 30.3%. Exports, meanwhile, fell by 1.3%, an improvement from the earlier -1.8% estimate. Together, net exports added nearly 5 percentage points to overall GDP growth.

For the first half of the year, the economy expanded at an average pace of just over 1% per quarter, or roughly 2.1% annualized. The first quarter had contracted by 0.5%, largely because of the import surge.

“The good news is consumption came in higher than previously thought. Americans are continuing to spend despite tariffs and uncertainty, albeit at a slower pace than past years,” said Heather Long, chief economist at Navy Federal Credit Union. “Going forward, the economy is likely to stay in this slower-speed mode with spending and growth around 1.5% as tariffs become more visible to American consumers.”

With much of the third quarter already reported, the Atlanta Fed’s GDPNow tracker estimates the economy is growing at about a 2.2% pace for the July–September period.