Robust US Economic Growth Revised Up, But Job Market Slows and Unemployment Rises
US Q2 economic growth revised up to 3.8% on strong consumer spending. August saw slower job creation, a 4.3% unemployment rate, and a significant drop in inflation.
GDP Grew At A Faster Than Expected 3.8% This Spring
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US Economy Expanded In Second Quarter Of 2025
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Overview
- The U.S. economy's second-quarter growth (April-June) was revised upward to an annualized rate of 3.8%, exceeding earlier estimates of 3.3% due to strong consumer spending.
- This robust economic expansion was further bolstered by a sharp 29.3% decline in imports, which significantly contributed over 5 percentage points to the overall GDP growth.
- Despite strong growth, job creation slowed considerably in August, with only 22,000 new jobs added, falling below expectations and contributing to an average of 53,000 monthly since March.
- The U.S. unemployment rate increased from 4.2% to 4.3% in August, with the Federal Reserve projecting a further rise to 4.5% by the end of the year.
- Amidst these mixed signals, inflation significantly dropped during August, and initial claims for unemployment insurance fell to their lowest level since July.
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Analysis
Center-leaning sources cover the US economic growth story neutrally by presenting a balanced view of economic indicators. They highlight positive revisions in GDP and consumer spending while also including cautionary data on the labor market and future economic headwinds. This approach provides a comprehensive, data-driven overview without leaning into a specific narrative.
"The US economy grew faster than previously thought this spring, fuelled by robust consumer spending and falling imports, according to new government data."
BBC News"The U.S. economy is resilient and the strong GDP is another indication that we are not at risk of any kind of recession, even with slowing labor market growth."
NBC News"The stronger-than-expected GDP data provides evidence that the economy remains on a solid footing."
CBS News"The U.S. economy expanded at a surprising 3.8% from April through June, the government reported in a dramatic upgrade of its previous estimate of second-quarter growth."
ABC News"An uptick in consumer spending helped the U.S. economy expand at a surprising 3.8% from April through June, the government reported in a dramatic upgrade of its previous estimate of second-quarter growth."
Associated PressArticles (11)
Center (5)
FAQ
The upward revision to 3.8% growth in Q2 2025 was primarily due to strong consumer spending and a sharp 29.3% decline in imports, which contributed over 5 percentage points to GDP growth.
Job creation slowed in August with only 22,000 new jobs added, falling below expectations due to softening underlying private sector demand and the impact of tighter economic conditions, despite the strong GDP growth.
The Federal Reserve projects the US unemployment rate will rise further from 4.3% in August to 4.5% by the end of 2025.
Inflation significantly dropped during August 2025, even as the job market showed signs of slowing and unemployment rose.
The US economy is expected to slow, with real GDP growth projected at 1.5% in 2025 and 1.3% in 2026. Risks include tariff-related cost increases, policy uncertainty, curtailed immigration, and elevated interest rates, all weighing on investment and consumption.
History
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