Key facts
- US second-quarter GDP growth was revised up to 2.2% from 1.5%.
- Consumer spending increased at a 3.8% rate in the second quarter.
- Business investment in AI infrastructure contributed to economic growth.
- The US trade deficit in goods widened 11.5% to $132.6 billion in August.
- Goods imports soared 5.5% to $336.1 billion in August, led by industrial supplies.
- Trade has subtracted from US gross domestic product for three straight quarters.
The US economy demonstrated stronger-than-initially-reported growth in the second quarter, with gross domestic product revised upward to a 2.2% annualized rate from a previous estimate of 1.5%. This upward revision, released by the Commerce Department's Bureau of Economic Analysis, surpassed economists' expectations.
The robust performance was largely attributed to strong consumer spending, which grew at a 3.8% annualized rate, and significant business investment in artificial intelligence infrastructure. These factors helped the economy overcome headwinds such as inflation.
However, the US trade deficit in goods widened sharply in August by 11.5% to $132.6 billion, driven by a surge in imports, particularly industrial supplies. This suggests that trade could remain a drag on economic growth in the third quarter. Trade has subtracted from gross domestic product for three consecutive quarters.
Despite a recent dip in consumer confidence, consumer spending has shown resilience, supported by households tapping into savings. Business spending on equipment also maintained growth. Final sales to private domestic purchasers were revised higher to a 4.6% pace, and gross domestic income grew at a 2.6% rate.