Real GDP Up in Q2
Real Gross Domestic Product in the United States was up in the second quarter of 2025 with a growth rate of about 3.8%*.
The stronger-than-expected 3.8% real GDP growth* in the second quarter of 2025 was driven mainly by resilient consumer spending paired with a notable decline in imports.
Personal consumption expenditures rose from $16.292 (billion) in Q1 to $16,355 (billion) in Q2 (chained 2017 dollars). According to the Bureau of Economic Analysis (BEA), spending on services such as transportation, financial services, and insurance, along with higher purchases of motor vehicles and parts, were key contributors. This resilience was supported by steady household demand and fewer layoffs, which helped sustain incomes despite slowing job growth and inflationary pressures.
A second major factor was the reduction in import drag. Imports fell from $4,558 (billion) in Q1 to $4,167 (billion) in Q2, easing the trade deficit and mechanically boosting GDP. Analysts note that part of this shift reflected earlier front-loading of imports in early 2025. With fewer imports, more of domestic demand translated into U.S. production, providing an important lift to the economy.
Other components contributed little to the rebound. Private investment declined from $4,548 (billion) in Q1 to $4,383 (billion) in Q2, while government spending decreased slightly from $3,994 (billion) to $3,993 (billion). Taken together, the Q2 acceleration reflects robust household consumption and a narrowing trade deficit offsetting modest declines elsewhere. The data suggest that strong consumer activity and improved trade conditions underpinned growth, though questions remain about the durability of these trends going forward.
A Closer Look
| Rank | 🚀 TOP Q/Q GROWERS | Q/Q Growth | Y/Y Growth | 📉 BOTTOM Q/Q PERFORMERS | Q/Q Growth | Y/Y Growth |
|---|---|---|---|---|---|---|
| 1 | Computers and peripheral equipment | +12.76% | +42.29% | Goods imports | -10.22% | +1.04% |
| 2 | Software | +6.07% | +12.19% | Imports (total) | -8.29% | +1.79% |
| 3 | Transportation equipment | +5.80% | +6.72% | Nondefense (federal) | -3.42% | -2.83% |
| 4 | Intellectual property products | +3.56% | +5.74% | Other information processing | -3.33% | +8.40% |
| 5 | Information processing equipment | +2.80% | +20.39% | Other equipment | -2.80% | -5.51% |
| 6 | Motor vehicles and parts | +2.33% | +6.47% | Structures | -1.93% | -5.26% |
| 7 | Equipment (overall) | +2.07% | +8.07% | Entertainment/literary/artistic | -1.39% | -2.29% |
| 8 | Research and development | +2.05% | +1.40% | Federal government | -1.34% | +0.34% |
| 9 | Nonresidential fixed investment | +1.78% | +4.03% | Residential investment | -1.30% | -1.72% |
| 10 | Transportation services | +1.72% | +1.69% | Goods exports | -1.19% | +1.36% |
Notes
* Continuous compounded annual rate of change
Source: Bureau for Economic Analysis, FRED
It’s Not Too Late to Register for the 2025 Kansas Economic Outlook Conference
Register
Get our newsletter delivered directly to your inbox
Leave a Reply