Revised data released by the U.S. Department of Commerce showed that U.S. gross domestic product (GDP) grew at an annualized rate of 1.5% in the second quarter, matching the initial estimate and below the 2.1% growth in the first quarter. Despite the overall slowdown, consumer spending remained resilient, indicating that the U.S. economy has not significantly lost momentum amid high inflation and external shocks.
Consumer spending continues to support growth.
From a structural perspective, household consumption remains the primary driver of growth this quarter. Consumer spending grew at an annualized rate of 3.4% in the second quarter, significantly higher than the 0.5% recorded in the first quarter. Consumption accounts for about 70% of U.S. economic activity, indicating that domestic demand continues to support economic expansion.
Data from the Ministry of Commerce also showed that, excluding volatile items such as government spending and trade, an indicator of underlying demand grew by 4.2% in the second quarter, up from 1.7% in the first quarter. Business investment remained strong, with non-residential commercial investment rising at an annualized rate of 8.5%.
AI-related imports have lowered overall growth rates.
The main factor dragging down the overall growth rate in the second quarter was imports. Since GDP statistics only account for domestic production, an increase in imports reduces the growth rate in calculations. From April to June, U.S. imports increased at an annualized rate of 12.5%, directly lowering second-quarter GDP growth by 1.64 percentage points.
The report noted that increased imports of products related to AI infrastructure, such as chips, are one of the key factors driving higher imports. As companies continue to invest in computing power and equipment, rising demand for these goods has also somewhat altered the growth structure this quarter.
Housing investment also rebounded in the second quarter, marking the first increase since the end of 2024. However, high mortgage rates continue to weigh on the U.S. real estate market, and the recovery in the residential sector remains limited for now.
High inflation coexists with expectations of tariffs
Regarding inflation, the Commerce Department report showed that prices rose 3.7% year-over-year in July, unchanged from June, but still significantly above the Federal Reserve’s 2% target. The report noted that energy prices have increased since the U.S. and Israel struck Iran at the end of February, adding to inflationary pressures.
Currently, high oil prices due to the conflict in Iran, threats by Trump to impose new tariffs on Canada and China, and rising costs for computers, gaming consoles, and semiconductors driven by AI infrastructure spending continue to jointly influence U.S. price trends.
Additional information: The Department of Commerce releases three estimates for Q2 GDP; this is the second revision, with the final data to be published on September 30.