The BEA revised GDP from 3.1% to 3.3% with spending from 1.4% to 1.6%.
The BEA’s Second Estimate of Gross Domestic Product for the 2nd Quarter 2025 was 3.3 percent up from 3.0 percent in the advance estimate.
- Real gross domestic product (GDP) increased at an annual rate of 3.3 percent in the second quarter of 2025 (April, May, and June).
- In the first quarter, real GDP decreased 0.5 percent.
- Real GDP was revised up 0.3 percentage point from the advance estimate, primarily reflecting upward revisions to investment and consumer spending that were partly offset by a downward revision to government spending and an upward revision to imports.
- Compared to the first quarter, the upturn in real GDP in the second quarter primarily reflected a downturn in imports and an acceleration in consumer spending that were partly offset by a downturn in investment.
Percentage Point Contributions to GDP 2025 Q2
Wild swings in imports are tariff related.
Source of Revisions
- Within investment, upward revisions to intellectual property products, equipment, and structures were partly offset by a downward revision to private inventory investment.
- The upward revision to consumer spending reflected upward revisions to both goods (notably, pharmaceutical products) and services (notably, health care as well as food services and accommodations).
- Within government, compensation was revised down, primarily reflecting revised BLS Current Employment Statistics data for state and local government.
AI was a primary influence on the upward revision.
The BEA provided this technical note: “The revision to intellectual property products reflected upward revisions to software, based on new Census Bureau Quarterly Services Survey data, and to research and development, based on newly available R&D expenses reported by publicly traded companies.”
For two quarters, nonresidential investment has been hot. That’s a reflection of AI-related investment.
I am working on some charts to show how AI impacted GDP and what to expect for the third quarter.
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August 23, 2025: What Do the Technical Charts Suggest about Long-Term Bond Yields?
Let’s discuss the fundamental and technical picture of long-term bonds.
August 22, 2025: Powell Admits Prior Monetary Framework Was Hugely Flawed
The Fed just announced a new monetary framework. Is it any better?
“The Fed just announced a new monetary framework. Is it any better?”
Has there ever been a framework which worked? Everything moves in cycles. Any framework will appear to work, until the down phase of a major cycle. Then the framework gets overwhelmed.
The FED’s framework hasn’t changed. It still uses interest rate manipulation. The only tool, credit control device, at the disposal of the monetary authority in a free capitalistic system through which the volume of money can be properly controlled is legal reserves. Powell eliminated legal reserves in March 2020.
re: “Has there ever been a framework which worked?”
In “The General Theory of Employment, Interest and Money”, pg. 81 (New York: Harcourt, Brace and Co.): John Maynard Keynes gives the impression that a commercial bank is an intermediary type of financial institution (non-bank), serving to join the saver with the borrower when he states that it is an: “optical illusion” to assume that “a depositor and his bank can somehow contrive between them to perform an operation by which savings can disappear into the banking system so that they are lost to investment, or, contrariwise, that the banking system can make it possible for investment to occur, to which no savings corresponds.”
In almost every instance in which Keynes wrote the term “bank” in his General Theory, it is necessary to substitute the term non-bank in order to make Keynes’ statement correct.
Long-term monetary flows, the proxy for inflation. With the de minimis exemption ending, the peak looks assured…
01/1/2025 ,,,,, 0.087
02/1/2025 ,,,,, 0.080
03/1/2025 ,,,,, 0.094
04/1/2025 ,,,,, 0.120
05/1/2025 ,,,,, 0.121
06/1/2025 ,,,,, 0.143
07/1/2025 ,,,,, 0.137
08/1/2025 ,,,,, 0.147
09/1/2025 ,,,,, 0.150 peak
10/1/2025 ,,,,, 0.144
11/1/2025 ,,,,, 0.145
12/1/2025 ,,,,, 0.121
01/1/2026 ,,,,, 0.133
02/1/2026 ,,,,, 0.141
03/1/2026 ,,,,, 0.113
04/1/2026 ,,,,, 0.084
05/1/2026 ,,,,, 0.092
06/1/2026 ,,,,, 0.086
07/1/2026 ,,,,, 0.079
re: “until the down phase of a major cycle”
That’s what Dr. Philip George’s The Riddle of Money Finally Solved is all about.
Bwahahahahah…..I warned you boomers – Medicare cuts are here! How will this change GDP?
https://www.nytimes.com/2025/08/28/health/medicare-prior-approval-health-care.html?unlocked_article_code=1.hk8.L_ZA.095JZYck6sPh
Next up Social Security.
Think an exit strategy will protect you? Global debt is off the charts.
If you don’t understand how an exit strategy will help you are beyond help. Enjoy Donald Trump’s death panels!
Have you witnessed the GOP town halls in red districts?
Iowa’s 1st state senate race that went to Trump in ‘24 by eleven points just lost in a special election to a Democrat by ten points or a swing of twenty-one points in only ten months.
Q3 will, I suspect, get us about 85% past trade distortions in so far as front running tariffs and probably about 50% in terms of their total effect on CPI.
We get the August jobs numbers on 9/6, and the next two months should give us a solid indication if we’re moving meaningfully towards a recession or not.
Woodcoin: an attempt at a physical cryptocurrency?
https://woodcoincrypto.com/
Wooden nickels making a comeback.
Didn’t seem to help the Buffett indicator much
Let’s see, Q1 + Q2 + AtlFed’s 2.2 for Q3 =s 1.67% GDP growth through 3/4s of 2025. Spectacular!
I don’t know what number you’re hoping for, but an average 1.67% real GDP growth is not that bad. Worse than Biden’s, but oh well.
The issue is where it goes from here.
“Within investment, upward revisions to intellectual property products, equipment, and structures were partly offset by a downward revision to private inventory investment”
Read: You are looking at the AI bubble while watching actual inventory disappear from shelves. The entire economy is being driven by vaporware, and clueless investors couldn’t be happier.
Polyps spread on Trump’s nose and forehead. Blood stain on his right hand.
In marches Thiel’s (some poor misguided fools allege, but of course I don’t believe it) implant/puppet, Vance? Kicking myself for selling off Palantir a long while ago.
Well if we’re in the 3.3% GDP golden age why are so many people complaining, even MAGA?
https://www.youtube.com/watch?v=kbxnX35sDDI
That’s what all the troop deployments are about. Complain too loudly and it’s off to a concentration camp near you.
And like I said, this isn’t North Korea or nazi Germany with a docile and unarmed population. There was a mass shooting this week and as usual police was useless. Everyone has guns, heck I have two assault rifles, shotguns, pistols and thousands of rounds of ammo. Won’t get to use them because I’ll be outta here enjoying the beach and ocean.
Cuts to SNAP, medicaid, medicare, nationalizing firms, tariffs, etc are all signs of a slow moving collapse. At some point, the clueless will clue in but it will be too late by then cuz only the sheep will be left behind.
They don’t give a rat’s ass about children, however, they’re just waiting for someone to pop the head of a masked ICE goon to really put the boot down. They will ramp up the provocation until they get it.
Then the gun control talk will start among the simps… and they’ll start handing them in.
Unfortunately, I won’t be able to participate, as all my guns were lost in a tragic boating accident.
That was fast:
https://x.com/Acyn/status/1960743194146242960
There isn’t really a beach somewhere to run and hide. The Klaus Schwab WEF globalists talk of a Great Reset. The most clueless may be those who think they are clued in.
Governor Newsom just announced a new program in Southern California, utilizing special California Highway Patrol units to fight crime. Saturday night in Beverly Hills, a burglar tried to break into singer Lionel Richie’s home while he was there. Upscale residents of Encino have been complaining about numerous home break ins, as well. Encino is where the burglary and murder of an American Idol producer and her husband occurred.
Definitely need an interest rate cut now!
How will Powell justify the next cut now as he capitulates to what Trump wants and demands?
Apparently, the market believes a September cut is in the bag, regardless of other economic numbers. Perhaps, Powell has taken all of the heat he can stand as there are probably things going on that have not been mentioned.
I still believe the 10-year UST bond is key.
He won’t. This report gives Powell all the political cover he needs to keep rates at present levels.
SPX bs. Tomorrow 1W ES might drop < Aug 11 hi. 1M NQ < July high. Rate cuts bs Deepseek competes with ChatGPT, not with NVDA. 1D QQQ: H&S ???
Q1 2025 fake negative. Q2 fake positive.
The econ is ok. Stanford digital “researchers”: The canaries in the coal mine: 2/ 3 years ago co adopted AI. Lately college grad can’t get a job. Newly hired workers 22 to 25: programmers, bookkeepers and accountants, those who serve customers… are sacked, along with boomers. HR cutting overhead have to do it legally. Same old story, blaming AI. Canaries bs.
Of course it’s 3.3%, if it isn’t they’ll get sacked by The Grifter in Chief.
Nobody downvoting knows Trump hasn’t set up this arrangement. What we DO know is that he sacked people for reporting actual numbers. The idea that 40 people from both sides of the aisle would cheat Trump’s numbers is reserved for the biggest conspiracy wackos on the planet.
16-Feb-21-2024-05-09-34-6872-PM.jpg (800×570)
Upswing supported by the FED
And we need rate cuts – why? (Other than to finance ridiculous federal deficits)
Trump needs to be able to afford his RE debts, that’s been his motivation for crashing rates, with no regard for the effects on the economy or regular Americans including all of his voters.
Plus free money means soaring risk markets, fads, a thousand crypto/NFT flowers bloom, Trump sons’ affiliated entities go up. “Event contracts” (gambling, bucket shop deals) on young men’s phone apps scoop up all spare change in a moment of optimism. Then rug pull, lots of new street people, but who cares about their suckers?
You hit it!
Are these real numbers, or are the toadies of the Cheeto Pedo in charge of them?
Nothing that comes out of Gov is real….
Data centers expand, as NVDA’s data center biz slackens. Time lag.
Maybe like the pyramids some day, in the endless deserts, to be marveled over by whoever or whatever survives.
When does the data measure the imports in a bonded warehouse that have yet to be paid for by a customer?