Adobe Stock
The U.S. economy grew at a 3.8% annual pace in the second quarter, driven by consumer spending and business investment, the Bureau of Economic Analysis (BEA) reported Sept. 25.
Reuters noted that it was the fastest economic growth in nearly two years.
The figure marked a sharp revision from the government’s earlier 3.3% estimate and surpassed economists’ expectations, according to Reuters. The economy had contracted 0.6% in the first quarter.
BEA said that the real gross domestic product (GDP) growth “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.”
Spending on services was revised to be higher, driven by transportation, financial services, and insurance, while goods spending was led by motor vehicles and parts, the agency said.
One CNBC reporter described the update as a “solid revision” and admitted he was “shocked” by the growth.
Commerce Secretary Howard Lutnick credited the surge to President Donald Trump’s economic policies, writing on X that “Biden’s economy could never reach 3%.”
According to Lutnick, deregulation, cheap energy, and a boom in manufacturing and software drove growth.
In a White House statement, White House Deputy Press Secretary Kush Desai said the growth is “thanks to the Trump agenda of tax cuts, deregulation, tariffs, and energy abundance.”
He added, “And this is just the beginning: new data from today also shows core capital goods orders beat expectations, paving the way for robust investment growth in Q3.”
