U.S. GDP Grows 3 Percent in Second Quarter of 2025

U.S. GDP grew sharply by 3 percent in the second quarter of 2025, data released Wednesday by the Bureau of Economic Analysis shows. In Q1, real GDP had decreased by a recalculated 0.5 percent on an annualized, seasonally adjusted basis. Earlier in the year, imports to the U.S. soared ahead of the Trump administration's tariff announcements, which had a negative effect on GDP. In the second quarter, which ran from April to June, the opposite happened. While many tariffs implemented by the Trump administration in April were almost immediately paused, new baseline tariffs of 10 percent are still much higher than previous import dues and high tariffs on cars and steel persisted. Together with stocks being full from Q1, imports to the U.S. sank in Q2.

In Q1, imported goods were not yet sold as importers were looking to stock up. Yet, spending on them was subtracted from GDP. Once the imports are sold, they would add to GDP again, forming a zero-sum contribution in the long term. Due to this so called front-loading behavior, imports were lower compared to sales in Q2, causing the steep increase in GDP. To sum up, both quarters have been atypical due to the adjustments businesses have been carrying out in the light of new tariff realities and it remains to be seen what effects tariffs will have on GDP in the long run - once pre-tariff stocks run out.

The last time the U.S. economy had shrunk was in Q1 of 2022, when the Russian invasion of Ukraine threw global markets into disarray. GDP contracted by 1 percent then, and recovered to a growth of 0.3 percent in the following quarter. Initially, the second quarter of 2022 also showed a decline of GDP, which would have meant the U.S. economy would have entered a technical recession. The U.S. also suffered a short but deep recession in Q1 and Q2 of 2020 when it experienced the steepest decline ever recorded in the course of the coronavirus pandemic. U.S. GDP growth jumped up again in Q3 of that year, however.