US economy grew faster than first reported in the second quarter of the year. It grew at a 3.8% annual rate, up from the original estimate of 3.3%.
This faster growth happened due to fewer imports and more consumer spending. Businesses also invested more in Artificial Intelligence (AI).
However, the economy slowed down after that. In the first quarter, the economy shrank by 0.6%, a bit worse than first thought.
This was partly because businesses rushed to bring in imports before President Trump’s new import taxes started, which made imports spike and hurt the economy in that quarter. When imports slowed down in the second quarter, the economy bounced back.
Experts say that the first and second quarter numbers do not fully show how the economy is doing because imports have been changing a lot. They expect slower growth in the second half of the year, around 1.5%, due to ongoing trade uncertainties.
When looking at income instead of production, the economy grew by 3.8% in the second quarter, which is less than the earlier estimate of 4.8%.
Income growth in the first quarter was revised up to 1.0% from 0.2%. When averaging both production and income, the overall growth was 3.8% in the second quarter, slightly lower than the 4.0% estimated before.
In the first quarter, the economy actually grew slightly instead of shrinking, based on this combined measure