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US economy rebounds a surprisingly strong 3% in the second quarter

PAUL WISEMAN
July 30, 2025

WASHINGTON (AP) -- The U.S. economy expanded at a surprising 3% annual pace from April through June, bouncing back at least temporarily from a first-quarter drop that reflected disruptions from President Donald Trump's trade wars.

America gross domestic product -- the nation's output of goods and services -- rebounded after falling at a 0.5% clip from January through March, the Commerce Department reported Wednesday. The first-quarter drop was mainly caused by a surge in imports -- which are subtracted from GDP -- as businesses scrambled to bring in foreign goods ahead of Trump's tariffs.

The bounceback was expected but the size of it wasn't: Economists had forecast 2% growth from April through June.

From April through June, a drop in imports -- the biggest since the COVID-19 outbreak -- added more than 5 percentage points to growth. Consumer spending registered lackluster growth of 1.4%, though it was an improvement over the first quarter's 0.5%.

Private investment fell at a 15.6% annual pace, biggest drop since COVID-19 slammed the economy. A drop in inventories -- as businesses worked down goods they'd stockpiled in the first quarter -- shaved 3.2 percentage points off second-quarter growth.

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