WASHINGTON (TNND) — The U.S. economy is showing surprising strength, with new government data revealing a faster pace of growth last quarter than previously estimated.
The Commerce Department reported Thursday that gross domestic product (GDP) expanded at a 3.8% annual rate from April through June — well above the initial 3% estimate. Economists say the revision underscores the resilience of the economy despite trade and tariff uncertainty.
The main driver was consumer spending. Personal consumption was revised upward to a 2.5% pace, indicating Americans continued to spend robustly throughout the spring. Economists believe that momentum has likely carried into the third quarter, with the Federal Reserve Bank of Atlanta projecting growth of 3.3% from July through September.
“The forward for ’26 is great because companies now can expense factories they’re making, data centers. So the private sector is back,” said Joe Lavorgna, senior counselor to the Treasury.
Still, caution signs remain. Unemployment claims overall are low, but filings by laid-off federal workers have been climbing in recent weeks. Meanwhile, retailers are preparing for what could be the weakest holiday hiring season since 2009, a signal that companies expect slower consumer demand in the months ahead.
Federal Reserve Chair Jerome Powell has stressed that the central bank will weigh the GDP numbers carefully as it considers future rate cuts. “If we ease too aggressively, we could leave the inflation job unfinished and need to reverse course later,” Powell said.
The Fed’s next interest rate decision is expected at the end of next month.