Real gross domestic product (GDP) increased at an annual rate of 3.8% in the second quarter of 2025, according to the third estimate released by the U.S. Bureau of Economic Analysis. In the first quarter, real GDP decreased 0.6%.
The increase in real GDP in the second quarter primarily reflected a decrease in imports, which are a subtraction in the calculation of GDP, and an increase in consumer spending. These movements were partly offset by decreases in investment and exports.
Personal consumption added 1.68 percentage points (pp) to growth, following a 0.42 pp addition in the first quarter of 2025. The increase in PCE was driven by services (1.21 pp) such as those in household consumption expenditure: healthcare (0.54 pp), food services (0.28 pp), and financial services and insurance (0.26 pp). Goods added (0.47 pp) to real GDP, with durable goods adding (0.17 pp) driven by motor vehicles and parts adding (0.23 pp). Nondurable goods added (0.30 pp) with food & beverages purchased for off-premises consumption (0.01 pp) and clothing and footwear (0.10 pp).
Business investment subtracted -2.66 pp to real GDP. Non-residential fixed investment added 0.98 pp, with structures subtracting 0.23 pp. Equipment and transportation equipment added 0.44 pp and 0.27 pp, respectively. Information processing equipment added 0.22 pp, and other equipment subtracted 0.12 pp. Residential fixed investment subtracted 0.21 pp.
Government spending subtracted 0.01 pp to real GDP. The Federal government subtracted 0.35 pp to real GDP while state and local added 0.33 pp.
Net exports had a significant effect on real GDP, adding 4.83 pp to growth. Exports subtracted
-0.20 pp after adding 0.02 pp in the first quarter of 2025, while imports added 5.03 pp to real GDP after subtracting -4.70 in the first quarter of 2025.
Read the BEA release.
