The US Department of Commerce announced on Wednesday (July 30) that the country’s economy grew by 3% in the second quarter, surpassing Dow Jones’ forecast of 2.3%. This growth is attributed to the improving trade balance and the regained consumer confidence. President Trump once again urged the Federal Reserve to cut interest rates following the economic report release.
According to the Commerce Department, after adjusting for seasonal and inflation factors, the annualized growth rate of the US GDP in the second quarter was 3%. Analysts noted that the abnormally high increase in imports in the first quarter was partly due to businesses stockpiling goods in anticipation of the Trump administration’s upcoming tariff hikes, leading to a temporary surge in the trade deficit and suppressing GDP.
Without considering the inflation factor, the economic size in the previous quarter exceeded $30 trillion for the first time. The Commerce Department stated that the actual growth of GDP in the second quarter, compared to the first quarter, primarily reflected a decrease in imports and an acceleration in consumer spending, although the decline in investment partially offset the GDP growth.
With a stable labor market supporting household spending power, consumer spending in the second quarter increased by 1.4%, higher than the 0.5% in the first quarter. Although exports fell by 1.8% in the second quarter, imports decreased significantly by 30.3%, reversing the 37.9% increase in the first quarter.
The GDP data highlights strong performance in key economic sectors, with evidence suggesting that while inflation has not disappeared, it is receding. President Trump took to his social media platform “Truth Social” to post about the second-quarter GDP data: 3%, far better than expected. He reiterated his call for the Federal Reserve to “cut rates now.”
“There’s no inflation! Let people buy things and refinance their homes,” Trump said. However, Federal Reserve officials have signaled their intention to maintain interest rates unchanged at the range of 4.25% to 4.5% in the monetary policy meeting scheduled for Wednesday. The Fed has kept rates at this level since December last year.
CNBC quoted Heather Long, Chief Economist at Navy Federal Credit Union, saying that the key word for the economy this summer is “flexibility.” According to Reuters, Christopher Rupkey, Chief Economist at FWDBONDS, stated, “The good news is, the economy is not in recession; the bad news is, this report does not show strong growth, which does not inspire confidence in the economic outlook for the second half of 2025.”