Increased consumer expenditures in the US have increased their economy because, from April to June, they were expanding by a surprising 3.8% and resisted the stock market and trade uncertainties that were expected to grow the growth of the second quarter of the country.
The American gross domestic product (GDP) recovered in the spring of 0.6% decrease in the first quarter caused by the fall of President Donald Trump’s trade wars. The Sales Department said on Thursday that previously estimated the growth of the second quarter at 3.3%and the predictions expected the repeat of this issue, AP reported.
“The American consumer has remained much stronger than many thought, even in the middle of the stock market sales and a lot of business uncertainty,” Heather Long, the chief economist of the Federal Credit Union, published on social media.
Key drivers of economic growth
The first quarter of the decline in GDP, which was the first economic concession of the US economy in three years, was driven by an increase in imports when businesses were plunged to obtain foreign goods before new tariffs were stored. Here is a schedule of the second quarter of the quarter:
- Consumer expenses: The biggest factor was a 2.5% increase in consumer expenditure, which is the main leap of 0.6% in the first quarter. In particular, service expenditure has more than doubled the previous estimates of 1.2%.
- Decreasing imports: The conversion of the trend in the second quarter increased April-June growth by more than 5 percentage points when imports dropped at 29.3% at a pace.
- Basic Economic Force: Part within the GDP data, which measures the basic health of the economy, increased 2.9% from April to June, from 1.9% in the first quarter. This category includes consumer expenditures and private investments, but excludes volatile items such as exports, supplies and government expenditures.
Economic headwriters
Despite the strong GDP numbers some parts of the economy showed a weakness:
- Private Investments: This sector dropped, with residential investments declining by 5.1%.
- Business reserves: A decrease in trading reserves has gained more than 3.4 percentage points from the second quarter growth.
- Federal Government expenditure: Federal government spending and investment dropped to 5.3% annual pace to 5.6% decrease in the first quarter.
Trump’s tariffs impact
Since Trump returned to the White House, he has overturned the decade of American politics that supported Freer Trade. He deposited two -digit tariffs on imports from almost every country and also focused on specific products such as steel, aluminum and cars, reported, etc.
Its reason is that this step will be protected by the American industry, lure factories back to the United States, and help pay for the massive tax cuts signed in the law 4th July 2025.
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However, the main economists killed this step and warned that extensive tariffs would not only harm the US economy, but also increase costs, as importers in the US will try to hand over costs to its customers. Therefore, tariffs may be inflation, although their impact on prices has been modest.
Labor market slowing down
Robust GDP values contrast with significant slowing on the labor market that affects Trump Administration’s business policy and previous federal reserve actions.
The unpredictable and sudden nature of Trump’s tariffs left the businesses confused, which contributed to a sharp decline in hiring.
The report of the work department published at the beginning of this month showed that the economy created 911,000 fewer jobs than originally mentioned in the year that ended in March. Since March, the creation of jobs slowed even more and reached an average of 53,000 per month, noted AP.
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The latest GDP report published on Thursday, September 25, was the third trading department trader and a recent view of the second quarter of the second quarter. He stated in the AP report in the message.
(Tagstotranslate) increased consumer expenses
