What happened
The US economy experienced stronger growth in the first half of 2025 than initially estimated, according to revised data from the Commerce Department. Gross domestic product (GDP) rose at a 2.2 percent annualized rate from April to June, exceeding the previous estimate of 1.5 percent. This upward revision was driven by increased consumer spending, investment, and government expenditures.
Real consumer spending saw a significant increase, rising 3.8 percent annualized, up from the initial estimate of 3.4 percent. Nominal growth, which is not adjusted for inflation, was also revised upward from 8 percent to 8.5 percent. Additionally, growth in real final sales to private domestic purchasers was revised up to 4.6 percent, indicating a strong underlying economic performance.
The revised data also brought positive news on inflation, with personal consumption prices increasing 5.0 percent, down from the initial estimate of 5.3 percent. Core inflation was revised downward to 3.3 percent from 3.6 percent. Furthermore, the first quarter's growth rate was revised upward to 2.5 percent from 2.1 percent.
In a separate report, the Commerce Department noted that American consumers expanded their purchases by 0.9 percent in August, despite sinking consumer confidence. Prices rose 0.3 percent in August, resulting in a 0.6 percent increase in real consumer spending. Income also rose by 0.2 percent before taxes and 0.3 percent after taxes.
