US Q2 GDP Rebound Driven by Drop in Imports

The U.S. economy grew at an annualized rate of 3% in the second quarter of 2025, rebounding from a 0.5% contraction in the first quarter, but much of this growth was attributed to a sharp drop in imports that artificially boosted GDP figures. Consumer spending rose moderately by 1.4%, while private sector investment experienced a significant decline, signaling underlying economic weakness. Economists cautioned that President Trump's tariff policies and volatile trade patterns have distorted key indicators, complicating accurate assessments of economic health. Underlying domestic demand growth was the weakest since late 2022, suggesting limited momentum. President Trump used the GDP figures to publicly pressure Federal Reserve Chair Jerome Powell to cut interest rates. However, most analysts warn the rebound may be unsustainable, with the Fed lowering its 2025 growth outlook to 1.4%.