GDP

The U.S. economy expanded at a solid rate in the second quarter, bouncing back from a modest decline in the first quarter. According to preliminary figures from the Bureau of Economic Analysis, real gross domestic product (GDP) – the value of goods and services produced in the United States – increased at a 3.0% annualized rate in the second quarter of 2025.

That followed a 0.5% contraction in the first quarter – a reading that was largely the result of a surge in imports before tariffs went into effect.   

Economic growth was supported by an uptick in consumer spending in the second quarter, but it remained relatively modest overall. Total personal consumption expenditures increased at a 1.4% annualized rate in the second quarter, which followed a tepid 0.5% gain in the first quarter.     

Within consumer expenditures, the durable goods category led the way with a solid 3.7% increase. Spending on nondurable goods (+1.3%) and services (+1.1%) registered modest gains in the second quarter. Consumer spending in the food services and accommodations sector bounced back from a first quarter decline and contributed 0.16% to overall economic growth in the second quarter.  

Investment had a mixed impact on economic growth in the second quarter. Residential investment was down 4.6% in the second quarter (the fourth decline in the last five quarters), while business investment was up 1.9%.

Business spending on equipment increased at a 4.8% annualized rate in the second quarter, while business spending on intellectual property products jumped 6.4%. Business spending on structures declined at a 10.3% annualized rate in the second quarter, which marked the third drop in the last four quarters.  

Real final sales to private domestic purchasers – the sum of consumer spending and gross private fixed investment – increased 1.2% in the second quarter. That was down from a 1.9% gain in the first quarter and represented the softest reading since the fourth quarter of 2022.

As expected, a sharp decline in imports was the largest contributor to economic growth in the second quarter. Total imports fell 30.3% in the second quarter, after surging 37.9% in the first quarter. As a result, net exports contributed nearly 5% to overall economic growth in the second quarter.

Looking ahead, the expectation is that economic growth will be uneven in the coming quarters, as uncertainty will continue to weigh on both consumers and business. However, even with a slowdown in the second half of the year, the National Restaurant Association expects growth to remain positive, with real GDP rising at a 1.7% annual rate in 2025.