The rebound followed a contraction in the first quarter, when businesses front-loaded imports to get ahead of President Donald Trump’s tariffs, weighing on growth. The recovery was supported by falling imports and continued strength in consumer spending.
From the income side, however, gross domestic income (GDI) grew at a revised 3.8% rate, down from the previously estimated 4.8%. Averaging GDP and GDI, gross domestic output rose at a 3.8% pace, slightly lower than last month’s 4% estimate but still pointing to broad resilience.The Federal Reserve Bank of Atlanta expects momentum to have carried through to the third quarter, with its model projecting robust growth.
Economists, however, caution that lingering trade uncertainty could slow the pace in the second half, limiting full-year growth to about 1.5%, Reuters reported.
Also Read: US jobless claims drop well below estimates easing labour market fears
Adding to the positive data flow, US jobless claims fell sharply last week. Initial claims dropped to 218,000, well below expectations, suggesting employers remain reluctant to cut staff even as hiring moderates.
First Published: Sept 25, 2025 6:46 PM IS
