The U.S. economy rebounds to 3% growth in second quarter -- but tariffs skew picture
Summary
The U.S. economy grew by 3% in the second quarter of the year after a decline in the previous quarter. This growth was influenced by changes in international trade due to tariffs, which also affected the import and export levels. Consumer spending increased by 1.4%, although overall growth remains slower compared to the last two years.Key Facts
- The U.S. economy grew by 3% from April to June.
- In the previous quarter, the economy had shrunk by 0.5%.
- The growth rate was affected by changes in trade due to tariffs on foreign goods.
- Imports rose early in the year to avoid tariffs, reducing GDP, since imports are deducted from GDP calculations.
- Imports decreased in the second quarter after tariffs took effect, making growth seem stronger.
- Consumer spending increased by 1.4% in the second quarter.
- Business and residential investments decreased, while state and local government spending increased.
- The average growth rate for the first half of the year was about 1.25%, lower than the nearly 3% growth in the past two years.
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