America’s Economy Keeps Roaring: 3% GDP Growth Shatters Expectations

In the second quarter of 2025, the U.S. economy surpassed experts’ predictions, as real gross domestic product (GDP) grew at 3%, the highest level since the third quarter of 2024, when it increased 3.1%.

The consumption side of the economy grew 1.4%, accelerating from 0.5% growth in the first quarter of 2025. In the first quarter of 2025, the real GDP dipped 0.5%. Wall Street consensus had projected approximately 2.5% growth.

The GDP growth primarily reflected “a decrease in imports and an increase in consumer spending that were partly offset by decreases in investment and exports,” the Bureau of Economic Analysis stated, adding, “The increase in consumer spending reflected increases in both services and goods. Within services, the leading contributors were health care, food services and accommodations, and financial services and insurance. Within goods, the leading contributors were motor vehicles and parts and other nondurable goods. … The largest contributor to the decrease in investment was private inventory investment, led by decreases in nondurable goods manufacturing (mainly, chemical manufacturing) and in wholesale trade (reflecting widespread decreases in durable goods industries).”

“Net exports added 5 percentage points to GDP after subtracting the most on record in the first three months of the year, the Bureau of Economic Analysis report showed,” Bloomberg News reported. “There are signs the policy uncertainty is starting to lift, which has given a boost to the stock market and helped support consumer sentiment.”

President Trump used the news about the GDP growth to renew his call for Federal Reserve Chairman Jerome Powell to lower interest rates, writing on Truth Social, “2Q GDP JUST OUT: 3%, WAY BETTER THAN EXPECTED! ‘Too Late’ MUST NOW LOWER THE RATE. No Inflation! Let people buy, and refinance, their homes!”

GDP growth is vital for an economy because it signals increased production and consumption of goods and services, which drives higher incomes and job creation. As businesses expand to meet growing demand, they hire more workers and invest in innovation. Strong growth also generates additional tax revenue, allowing governments to fund infrastructure, education, and defense without raising tax rates, while making the country more attractive to foreign lenders.