US economy grows faster than expected in Q2 2025

The US economy grew at a faster-than-expected pace in Q2 2025, driven by a sharp decline in imports and an acceleration in consumer spending, which partially offset the drop in investment and exports.

According to data released Thursday by the Bureau of Economic Analysis (BEA), real gross domestic product (GDP) grew at a 3.8% annual rate in the second quarter of 2025, compared to a 0.6% contraction in the first quarter.

The final GDP rate of change was revised 0.5% higher than previously estimated, thanks to an upward revision in consumer spending data, reflecting the resilience of domestic demand.

On the price front, the Domestic Purchase Price Index (DPPI), a measure of inflation that focuses on the prices paid by consumers and businesses for purchases, whether domestic or imported, rose 2% during the quarter ending in June, an upward revision from the second reading of 1.8%.

The personal consumption expenditures price index slowed to 2.1%, an upward revision from 2%, compared to a 3.7% increase in the first quarter.

The core index, which excludes volatile food and energy prices, the Federal Reserve's preferred inflation measure, also slowed to 2.6%, from 3.5%, but this represents an upward revision from the second reading of 2.5%.