The U.S. economy grew at a pace of 2.2% from April to June, bolstered by strong consumer spending and business investment, according to a report from the Commerce Department. This growth represents a downgrade from 2.5% in the first quarter and an upgrade from a previous estimate of 1.5% for the second quarter.
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Consumer spending, which accounts for approximately 70% of U.S. economic activity, rose at an annual rate of 3.8%, a significant increase from 0.7% in the January-March period. However, the overall growth figure was negatively impacted by imports, which surged at a rate of 12.6% during the same timeframe, primarily driven by increased shipments of computer chips and other goods that support artificial intelligence investment. This rise in imports subtracted nearly 1.7 percentage points from second-quarter growth.
Despite challenges, including geopolitical tensions and an energy price spike due to ongoing conflicts with Iran, the U.S. economy has demonstrated resilience. Business investment, excluding housing, grew at a robust rate of 9% in the second quarter, reflecting a boom in AI investments. A measure of the economy's underlying strength, which excludes volatile government spending and trade data, showed growth at a strong 4.6%, up from 1.8% in the first quarter.
Investment in housing increased by 2.8%, marking the first gain since the end of 2024 despite pressures from high mortgage rates. This report is the final of three estimates regarding second-quarter GDP growth, with the initial assessment of third-quarter growth set to be released on October 29.