As many were bracing for signs of a potential slowdown, the U.S. economy surprised everyone by picking up pace in the second quarter of the year.
With talks of a recession still echoing from earlier months, the latest figures are painting a much brighter picture.
Growth Surpasses Expectations and Calms Recession Fears
Between April and June, the U.S. economy expanded by 3%, outperforming the 2.3% growth that most analysts had projected.
This stronger-than-expected showing comes after a shaky start to the year, where the economy had actually shrunk slightly. Now, momentum seems to be building again.
Trade and Shoppers Fuel the Economic Turnaround
A big part of this rebound is tied to two key areas: trade and consumer behavior.
Imports, which had previously surged as businesses rushed to beat impending tariffs, fell by over 30% in the second quarter.
That shift helped reduce the trade imbalance significantly.
On the other hand, consumers appeared to regain their confidence.
Spending rose by 1.4%, nearly triple the 0.5% increase seen earlier in the year.
While exports dipped slightly by 1.8%, the steep drop in imports gave the economy some breathing room and helped improve the overall trade position.
Trump Praises Numbers, Calls for Rate Cuts
President Donald Trump wasted no time reacting to the news.
Posting enthusiastically on Truth Social, he hailed the numbers as “WAY BETTER THAN EXPECTED!”
He also used the moment to urge the Federal Reserve to slash interest rates, insisting, “MUST NOW LOWER THE RATE. No Inflation! Let people buy, and refinance, their homes!”
Analysts Push Back on Pressure to Lower Rates
Despite Trump’s push for rate cuts, economists and financial experts see things differently.
Many believe that the Fed now has even more reason to hold its current course.
“The strength in these numbers likely puts to bed the possibility of a rate cut from the Fed who are due to meet later today,” said Isaac Stell, an investment manager at Wealth Club.
She added that even with mounting political pressure, Fed Chair Jerome Powell and his team are likely to maintain a steady approach unless the economy shows signs of serious strain.
Wall Street Reacts with Cautious Optimism
Before markets opened, investors responded to the upbeat economic news with mild gains.
Futures tied to the S&P 500 inched up 0.1%, while Nasdaq futures climbed by 0.3%.
Although the response wasn’t dramatic, it reflects a sense of cautious optimism as investors wait to hear what direction the Fed will take next.
What Comes Next?
With the economy growing faster than anticipated and inflation seemingly under control, all eyes now turn to the Federal Reserve’s decision.
Will they yield to political pressure and lower rates to encourage borrowing, or will they stay the course to avoid overheating the economy?
The answer could shape financial markets, consumer confidence, and housing decisions in the months ahead.
For now, the U.S. economy is holding its ground — and even picking up speed.