The BEA revised second-quarter GDP from 3.3 percent to 3.8 percent.
The BEA reports Gross Domestic Product 2nd Quarter 2025 (Third Estimate)
GDP Revision Details
- The increase in real GDP in the second quarter 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. Real GDP was revised up 0.5 percentage point from the second estimate, primarily reflecting an upward revision to consumer spending.
- Real final sales to private domestic purchasers, the sum of consumer spending and gross private fixed investment, increased 2.9 percent in the second quarter, revised up 1.0 percentage point from the previous estimate.
- From an industry perspective, the increase in real GDP reflected increases of 10.2 percent in real value added for private goods-producing industries and 3.5 percent for private services-producing industries that were partly offset by a decrease of 3.2 percent in real value added for government.
Contributions to GDP
Tariff-related distortions have seriously impacted GDP. First there was front-running then a collapse in imports. Neither represents a realistic picture.
Real GDP and Related Measures
Price Index Revisions
- The price index for gross domestic purchases increased 2.0 percent in the second quarter, revised up 0.2 percentage point from the previous estimate.
- The personal consumption expenditures (PCE) price index increased 2.1 percent, revised up 0.1 percentage point.
- Excluding food and energy prices, the PCE price index increased 2.6 percent, also revised up 0.1 percentage point.
GDP revisions and PCE price index revisions give no indication the Fed should be cutting interest rates further.
The Fed is going to have its hands full with higher prices and a weakening jobs market.
So ongoing or upcoming recession or not, Mish?
The old saying that the beatings will cease when moral improves can now be paraphrased to the firing will cease when the data gets better. Somebody got the message.
Sooooooo,
This is a good bit of information to play with! Revisions are always interesting and this one portends no interest rate changes. The right wing will go nuts!
Trumps head will explode in anger!
Kill the messenger! Fire them! Eat their children!
Laughing Out Loud!
It would have been 3.81 without the tariffs.
Hard to grow gdp when the nations largest employer is firing workers.
The only good spending is productive spending. Cutting waste and inefficiency is a plus. You wouldn’t hire to have holes dug then filled up and call it “good”, would you?
Mish when was the last time you saw consumer spending component revised up 100bp on the *third* revision?
The Fed is going to have its hands full with higher prices and a weakening jobs market.
Furthermore, lowering rates is NOT going to stop the slow decline in the job market. Why? It’s very simple & it’s been said time & time again. $2T+ in annual deficit spending is extremely anti-inflationary.
The US economy needs two major adjustments:
#1 Millions of Americans must reset their career path expectations which will not happen overnight.
#2 Some reasonable level of AI regulation that will slow it wiping out jobs needs to be implemented. How, when & what that looks like, I have no idea, and it will not happen overnight.
#2 sounds very EU-like.
Nanny state, anyone?
They won’t let us rape, steal, or murder either… it’s suffocating!
People losing jobs to ai will have the same results as out sourcing/ illegals working and past tech improvements. Less people working less taxes for the gov and more social problems. .
I agree. That’s the how, when & what part that’s completely up to interpretation. But once it really gets rolling, rest assured there will be a massive push back. That day is coming; it’s just a matter of how soon. The good news is that this is a world-wide in terms of industrialized nations.
I wonder it China’s recognition to the WTO that they no longer need special treatment has anything to do with the looming rise of AI?
PCE price index released tomorrow. 10 Year Treasury is now 4.187%.
Yes, the TNX is the big story. After rate cuts last week, the TNX yield went from the lower 4 month channel line to the upper channel line. The strange thing is given 3 days down in the stock market, TNX sold off (yields higher) too.
I can get on board with the comment that “The Fed is going to have its hands full with higher prices and a weakening jobs market.” If they cut rates or do QE their load will be greater as they will exacerbate increasing inflation. It would not surprise me to see a situation similar to the early 1980’s when we had little growth and high inflation. It took very high interest rates to repair that situation, the difference now being we have a federal debt about 40 times higher. What a mess and it exists because of debt, but we owe it to ourselves, it does not matter: we will soon know.
The Fed shot 3 blanks and is working on number 4. If interest rates go much higher, it will force the Fed to RAISE rates by a lot.
=GDP Revised Higher to 3.8 Percent
one of most ridiculous metrics EVER!!
let me explain!!
======
MOST PEOPLE dont realize that it is NOT year/year qrt estimates.
it is qrt over prev qrt !
why it is important!
when you calc qrt /qrt year / prev year, you automatically remove seasonality as
you are comparing only 1qrt 2025 to 1 qrt 2024!
====
but PHDS in BEA think it is too easy to calc monetary diff in total activity in such big country as USA w/ +-30 trln gdp , 350 mil ppl, millions of economical subjects so they calc qrt over prev qrt!!!
talk about VANITY and pride!!
alx
Despite all this you can bet your bottom dollar the finance baboons will see this and go “NUMBER GO UP! NUMBER UPPIE!” and invest even harder than before. The market really is kind of like watching sea monkeys these days. Anyone remember those things?
I remember adverts for them, in the back of comic books. It puzzled me. How can they ship live animals in the mail and expect them to live? Is this an actual advert or is “fake products” part of the “comic book experience”? … I didn’t buy the Joe Weider protein powder either…
Some survived and flourished in New York, becoming the ancestors of the finance baboons we know today.
At the national level, home prices continue to grind higher setting new records. The median sales price rose 2% from a year ago to $422,600, extending a string of straight year-over-year gains since mid-2023, NAR data show.
This is impressive given that Seattle and the Bay Area markets suffer from tech job losses, DC is being hit with government layoffs, and pandemic locations are hurting because remote work is ending.
Wish I knew when anything real will start to matter again. Until then, we live in partial simulation.
Help me look for the holodeck console…
I agree, but nothing has materially changed to a significant downside:
Continued, enormous, federal fiscal deficit spending
Mortgages rates are 50+ BP lower than a year ago
Astronomical stock levels
Tax cuts galore & lower business regulations
To-date, inflation has not spiked anywhere near 2022 levels
Solid GDP
Low un-employment
Overall consumer credit levels (debt to income) remain solid
Millions of homeowners with sub 3% mortgages
From the Imperial Throne, @TheRealTerranEmperor
I have tolerated the Halkan “pacifism” for too long. It was a clever ruse. While we built an Empire with blood and iron, they sat on their dilithium crystals, charging us outrageous prices! They’ve been ripping off the Terran Empire for decades.
This ends now.
In 90 days, all Halkan dilithium imports will face a 200% Imperial Tariff. Let them see how “peaceful” it is when their economy collapses.
And before any weak-minded fools panic, this will not affect our fleets. My brilliant business partners at the Orion Syndicate have innovated. Next year, we will retrofit our starships to run on Mugato farts. It’s a beautiful, wonderful source of energy. The energy yield is staggering. The smell… is the smell of victory.
Tremble before our green, gaseous might.
#TerranSupremacy #MugatoGas #HalkansWillPay #ImperialEnergyIndependence #EpsteinRomulanHoax
Trump’s Tariffs Have Already Hurt the Economy—and the Pain Is Only BeginningThe OECD just published its projections for American growth, and they’re grim.
https://reason.com/2025/09/24/trumps-tariffs-have-already-hurt-the-economy-and-the-pain-is-only-beginning/