US Economy Bounces Back With 3.3% Growth in Spring, Trade Turmoil Still Looms

The US economy shook off a rocky start to 2025, posting solid growth in the second quarter as consumers kept spending and trade flows swung sharply in America’s favor.

According to new figures from the Commerce Department, gross domestic product (GDP) — the broadest measure of goods and services produced — grew at a 3.3% annual pace from April through June. That’s a touch better than the government’s first estimate of 3% last month and a big turnaround from the 0.5% contraction in the first quarter.

The rebound came after businesses scrambled earlier this year to import foreign goods before President Donald Trump’s sweeping tariffs kicked in, a rush that temporarily dragged the economy into the red. In the spring, imports plunged nearly 30%, giving GDP an extra boost of more than five percentage points. Exports, meanwhile, slipped only slightly.

Consumer spending, which makes up about 70% of the economy, was revised higher too — rising at a 1.6% pace instead of the 1.4% initially reported. That’s still sluggish by historical standards but stronger than the near-standstill at the start of the year. Private investment, on the other hand, remained weak, falling at its steepest rate since the depths of the pandemic.

Economists say the trade war is leaving businesses jittery. Trump has slapped tariffs on imports from nearly every country, targeting everything from steel and aluminum to autos, while promising the levies will shield US industries and help fund his recent tax cuts. Mainstream economists counter that tariffs ultimately raise costs for American businesses and consumers.

“The good news is Americans are still spending, despite the uncertainty,” said Heather Long, chief economist at Navy Federal Credit Union.

But she warned the economy is likely to settle into “slower speed mode,” with growth closer to 1.5% as higher prices from tariffs filter through.

A measure closely watched by the Federal Reserve — so-called “final sales to private domestic purchasers,” which strips out trade, inventories, and government spending — rose 1.9% last quarter, signaling some underlying resilience. Corporate profits also ticked up after a sharp drop in early 2025.

Looking ahead, the economy is tracking closer to 2% growth in the current quarter, according to the Atlanta Fed’s GDPNow gauge. Inflation remains moderate, though analysts say the bigger test will be how businesses and consumers adapt if tariffs keep driving costs higher.

For now, the US has pulled off a spring rebound. But with trade battles still raging, the question is how long the momentum lasts.

The Associated Press, Bloomberg, and CNBC contributed to this report.