US GDP Jumps To 3.0% In Second Quarter, Trouncing Estimates And Reversing Q1 Contraction

The US economy showed a surprising rebound in the second quarter, with GDP growing at a brisk 3.0%, reversing the contraction seen in the first quarter. This improvement was largely driven by a decrease in imports, which positively impacted the GDP calculation. Consumer spending also accelerated compared to the previous quarter. However, fixed investment saw a significant drop, raising concerns about data center investments. Private inventories also decreased as retailers unloaded stock accumulated due to tariffs. Net exports made a substantial positive contribution to GDP due to the import collapse. Personal consumption, while slightly below expectations, still showed an increase from the first quarter. Real final sales to private domestic purchasers indicated a slowdown compared to the first quarter. Inflation data was mixed, with the GDP price index down but core PCE above expectations. This economic performance is seen as a normalization after the trade-related disruptions of the first quarter.