US second-quarter GDP revised up to 3.8%, strongest in two years

The United States economy grew at a faster clip than earlier thought in the second quarter, with revised data underscoring its resilience despite headwinds from trade policy and slowing global momentum.

Gross domestic product (GDP), the broadest measure of economic output, expanded at an annualised 3.8% pace from April to June, the Commerce Department said in its third and final estimate. That is well above the 3.3% reported in the second estimate and the initial 3% figure.

The rebound followed a contraction in the first quarter, when businesses front-loaded imports to get ahead of President Donald Trump’s tariffs, weighing on growth. The recovery was supported by falling imports and continued strength in consumer spending.

From the income side, however, gross domestic income (GDI) grew at a revised 3.8% rate, down from the previously estimated 4.8%. Averaging GDP and GDI, gross domestic output rose at a 3.8% pace, slightly lower than last month’s 4% estimate but still pointing to broad resilience.

The Federal Reserve Bank of Atlanta expects momentum to have carried through to the third quarter, with its model projecting robust growth.

Economists, however, caution that lingering trade uncertainty could slow the pace in the second half, limiting full-year growth to about 1.5%, Reuters reported.

Also Read: US jobless claims drop well below estimates easing labour market fears

Adding to the positive data flow, US jobless claims fell sharply last week. Initial claims dropped to 218,000, well below expectations, suggesting employers remain reluctant to cut staff even as hiring moderates.