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September 25, 2025
US GDP Second Quarter 3.8% Revision: The US economy posted stronger gains in the second quarter than earlier thought. Analysts say that strength likely carried into the third quarter, a sign of how durable the economy remains.
According to the Commerce Department’s final report released Thursday, GDP expanded at an annualized pace of 3.8% from April through June.
That figure tops the prior 3.3% estimate and is well above the initial reading of 3%. The upward revision in GDP was driven mainly by stronger consumer spending.
The latest figures show personal consumption climbed at a 2.5% annualized rate in the second quarter. That’s a big jump from the earlier estimate of 1.6%.
Such a wide gap between the first and third estimates is rare. “It’s definitely unusual and worth noting,” said Bret Kenwell, a US investment analyst at eToro, in comments to CNN.
“This year’s economic data has been unpredictable, especially over the past few months,” he said. “Policy uncertainty has remained high throughout 2025.
Given all the moving parts in the GDP report, it’s understandable to see larger-than-expected revisions in a year of unusual volatility.”
Still, the second quarter’s story is straightforward. Rising consumer spending and lower imports fueled a rebound in the spring.
Earlier in the year, GDP had been weighed down as importers built up inventories ahead of President Donald Trump’s tariffs.
The Federal Reserve Bank of Atlanta projects that the economy stayed on a strong growth path in the third quarter. GDP is expected to rise at an annualized rate of 3.3%.
The first official government estimate for third-quarter GDP will be published next month.
“Thursday’s GDP revision confirms the economy expanded steadily in the second quarter,” said Paul Stanley, chief investment officer at Granite Bay Wealth Management, in an analyst note.
“This growth came even amid heightened tariff uncertainty.” He emphasized the economy’s resilience. “The robust GDP indicates that a recession is unlikely, even with the labor market showing signs of slowing,” Stanley said.
Yet Another Quarter of Solid Growth?
The US labor market is cooling, and consumer confidence is dipping once more. Still, Americans are keeping their spending steady.
Consumer spending is crucial, making up about two-thirds of the country’s economic activity.
Against expectations, retail sales grew 0.6% in August from the previous month. July had recorded the same rise, according to Commerce Department figures.
The government is set to publish a more detailed report on August consumer spending this Friday. The data will cover both goods and services as part of the monthly Personal Consumption Expenditures release.
Still, a softer labor market could strain the economy. If layoffs rise, consumer spending—and the broader economic engine—may take a hit.
Unemployment claims remained fairly low last week, according to the Labor Department’s Thursday report. Still, layoffs among federal employees have been creeping up and could keep rising.
Meanwhile, the Commerce Department reported a 2.9% rebound in new durable goods orders for August. This came after two months of declines and was fueled by stronger demand for aircraft and related components.
When transportation equipment is excluded, durable goods orders edged up just 0.4% last month.
Meanwhile, new orders for non-defense capital goods, not including aircraft—a key indicator of business investment—climbed 0.6% in August. This was a slight drop from July’s 0.8% rise.
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