Financial News: U.S. GDP Surges 3.8% In Q2, Much More

U.S. GDP Surges 3.8% In Q2, Much More Than Previously Estimated

(RTTNews) - Revised data released by the Commerce Department on Thursday showed the U.S. economy unexpectedly grew by much more than previously estimated in the second quarter of 2025.

The report said real gross domestic product spiked by 3.8 percent in the second quarter compared to the previously reported 3.3 percent surge. Economists had expected the pace of GDP growth to be unrevised.

The Commerce Department said the unexpectedly stronger than previously reported GDP growth came as the jump in consumer spending was upwardly revised to 2.5 percent from 1.6 percent. Consumer spending rose by 0.6 percent in the first quarter.

"Consumers spent more than previously thought in Q2, leading to a noticeable upward revision to real GDP growth but we will have to wait for the monthly decomposition of the revisions to consumption to gauge whether the trajectory is materially better for Q3," said Ryan Sweet, Chief U.S. Economist at Oxford Economics.

He added, "Odds are that we will be revising higher our forecast for Q3 GDP because of the incoming data on spending this quarter."

The sharp increase in GDP in the second quarter reflected the consumer spending growth as well as substantial downturn by imports, which are a subtraction in the calculation of GDP.

The report showed imports plummeted by 29.3 percent in the second quarter after skyrocketing by 38.0 percent in the first quarter.

The positive contributions from consumer spending and imports were partly offset by decreases in investment and exports.

The spike in GDP the second quarter came following a 0.6 percent decrease in the first quarter, with the upturn primarily reflecting the downturn in imports and the acceleration in consumer spending that were partly offset by a downturn in investment.

The report also said the jump by the personal consumption expenditures price index in the second quarter was upwardly revised to 2.1 percent from 2.0 percent. The PCE price index soared by 3.4 percent in the first quarter.

The second quarter surge by the core PCE price index, which excludes food and energy prices, was also upwardly revised to 2.6 percent from 2.5 percent. The core PCE price index shot up by 3.3 percent in the first quarter.

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