U.S. GDP Jumps 3% As Economic Revival Surpasses Forecasts

(MENAFN- The Rio Times) The US Department of Commerce reported Wednesday that the American economy grew 3% in the second quarter of 2025, clearly beating forecasts.

This marks a major turnaround after the first quarter's 0.5% decline. It is the strongest quarterly growth since the start of the year.

The main drivers were a drop in imports and solid consumer spending. Trump administration trade strategies, focusing on US production and less reliance on imports, appear to be making an impact.

Household spending-the key engine-jumped by 1.4% last quarter as Americans kept buying, even with higher prices than before.

Meanwhile, inflation cooled, with the Federal Reserve's core inflation gauge at 2.5%, down from 3.5% earlier this year but still a little above its 2% target. This easing price pressure creates a more stable environment for businesses and families alike.

New job creation is picking up pace. The ADP data show 104,000 private sector jobs were added in July.


U.S. GDP Jumps 3% as Economic Revival Surpasses Forecasts
Workers who change jobs see pay raises averaging over 7% this year, and even those who stay have seen their pay grow 4.4%. These trends suggest labor demand is steady and wages are rising, both of which encourage spending.

However, the housing sector is still cooling. Contracts to buy new homes fell by 0.8% in June. Mortgage rates remain high, averaging 6.83%, which continues to make borrowing tough for would-be buyers. While listings are up, demand has yet to bounce back.

In the energy sector, oil inventories unexpectedly increased by 1.54 million barrels last week. At the same time, gasoline stockpiles dropped.

This points to changing patterns in how Americans use fuel but also shows US energy output remains strong-an important part of the administration's goal of energy independence.

The Federal Reserve left interest rates unchanged this month, signaling that it is waiting for clearer signs before acting. Inflation is closer to target, but policymakers want to keep prices under control without slowing the recovery.

Put together, the last quarter's figures show Trump's approach-boosting domestic production, supporting workers, and focusing on lowering imports-is having real effects.

The result is faster growth, rising wages, and a more self-reliant economy. These positives stand out even as housing and some business investment remain subdued.

For trading partners abroad, the takeaway is clear: America, for now, is making its economy work harder at home, and that is reshaping how it does business with the world.

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