Despite the persistent high gasoline prices, the U.S. economy has shown remarkable resilience this spring. The second-quarter Gross Domestic Product (GDP), adjusted for inflation, grew at an annualized rate of 2.2%, exceeding expectations, primarily driven by strong growth in consumer spending and business investments.
The Bureau of Economic Analysis (BEA) of the United States released the final data for the second-quarter GDP on Wednesday, September 30, showing an annualized growth rate of 2.2% for the quarter covering April, May, and June. This figure surpassed the expectations of economists surveyed by LSEG, who had previously forecasted a GDP growth rate of 1.5% for the second quarter.
Consumer spending, which accounts for about 70% of economic activity in the U.S., saw healthy growth at an annual rate of 3.8%, an increase from the 0.7% growth recorded in the January to March period.
The overall growth performance was dragged down by import data. Since GDP only measures domestic production, imports need to be subtracted when calculating. Imports grew at an annual rate of 12.6% from April to June, partly due to a surge in purchases of computer chips and other products to support artificial intelligence (AI) investments, leading to a reduction of nearly 1.7 percentage points in the second-quarter economic growth rate.
Despite the escalating tensions with Iran and the resulting surge in energy prices, the U.S. economy has demonstrated remarkable resilience.
Business investments, excluding housing investments, grew by 9% in the second quarter, reflecting the impact of the AI investment boom. Additionally, an indicator of economic potential strength – excluding volatile government spending and trade data – showed a strong growth of 4.6%, higher than the 1.8% in the first quarter.
Housing investments grew by 2.8%, marking the first rebound since the end of 2024. Previously, high mortgage rates had been suppressing the real estate market.
In a statement on Wednesday, Atsi Sheth, Chief Credit Officer at Moody’s Ratings, said, “Today’s U.S. GDP data release shows that consumers and businesses continued spending and investing in the second quarter despite high inflation and uncertainty in interest rates.”
This report released on Wednesday is the final of the three estimates from the Department of Commerce regarding second-quarter GDP growth. Preliminary data on the third-quarter growth is expected to be announced on October 29th.