US economic growth rebounded in the second quarter after contracting for the first time in three years to start 2025.
Gross domestic product grew at an annualized pace of 3% in the second quarter, according to the Bureau of Economic Analysis’s advance estimate. Economists surveyed by Bloomberg had expected a 2.6% increase.
The reading comes after a large surge in imports ahead of President Trump’s tariff whipsaw caused GDP to contract by 0.5% in the first quarter. The BEA noted that the second quarter bounce back reflected a decrease in imports, which are a subtraction in the calculation of GDP.
Wednesday’s GDP data covers the months of April through June, meaning it reflects activity during the first three months that the widest swath of Trump’s tariffs were in place. However, it does not reflect recent tariff updates from July.
Read more: What Trump’s tariffs mean for the economy and your wallet
Investors have been closely watching how the most aggressive US tariff stance in a century will impact economic growth. In April, Trump’s initial “Liberation Day” tariffs spooked markets as recession fears rose.
But in recent months, economic data has largely been better-than-feared, and recession concerns have eased. The probability investors were putting on a US recession in 2025, as tracked by popular online betting platform Polymarket, was just 17%, down from a peak of 66% on May 1.
Gross domestic product grew at an annualized pace of 3% in the second quarter, according to the Bureau of Economic Analysis’s advance estimate. Economists surveyed by Bloomberg had expected a 2.6% increase. (Kirby Lee-Imagn Images) · USA TODAY Sports via Reuters Connect / Reuters
Josh Schafer is a reporter for Yahoo Finance. Follow him on X @_joshschafer.
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