US GDP Growth revised to 3.8%.

US Q2 2025 GDP Growth Revised Upward

Yes, the US Bureau of Economic Analysis (BEA) released its third and final estimate on September 25, 2025, revising the annualized real GDP growth rate for the second quarter (April–June 2025) to 3.8%. This marks a significant upward adjustment from the advance estimate of 3.0% (released July 30, 2025) and the second estimate of 3.3% (released August 28, 2025). The revision underscores the resilience of the US economy amid challenges like tariff uncertainties and a first-quarter contraction.

Key Details from the Report:

• Growth Drivers :The upward revision was primarily driven by stronger-than-expected consumer spending (revised up) and a larger decline in imports (which subtract from GDP calculations, as businesses front-loaded purchases ahead of potential tariffs). These were partly offset by softer investment and exports.

• Comparison to Q1:This follows a revised Q1 contraction of -0.6% (down from -0.5%), resulting in an average H1 2025 growth rate of about 1.6%. The Q2 rebound is the fastest since Q3 2023.

• Inflation and Other Metrics:

  1. PCE price index (key Fed inflation gauge): +2.0% (revised down slightly).

  2. Core PCE (excluding food/energy): +2.5%.

  3. Real gross domestic income (GDI): +4.8% in Q2, signaling robust income growth.

• Corporate Profits :Rose by $65.5 billion in Q2 after a Q1 decline, with margins at 13.1% of GDP despite tariff-related cost pressures.

Economic Context and Implications :Analysts view this as evidence of consumer resilience, with personal consumption revised higher, supporting the idea that households are holding up despite elevated interest rates and policy volatility. However, momentum is cooling overall: H1 growth averaged 1.6% compared to 3.3% in H2 2024. Forecasts for Q3 suggest continued strength at around 3.3% (per the Atlanta Fed), but risks like government shutdowns, tariffs, and slowing job growth (recent revisions showed 911,000 fewer jobs added in the year to March) could temper the outlook. EY projects full-year 2025 GDP at 1.5%, with further moderation to 1.3% in 2026.