U.S. Economic Growth Beats Expectations

The U.S. economy beat expectations in the second quarter of 2025, growing at a 2.8% annualized rate, signaling resilience despite global uncertainty and mixed domestic signals.

The stronger-than-expected growth was fueled by a surge in exports—up more than 7%—and continued strength in the labor market, which helped offset declining business investment and uneven consumer spending. Economists say the numbers reflect solid underlying momentum.

“This isn’t a breakout quarter, but it’s solid,” said Mark Zandi, chief economist at Moody’s Analytics. “There’s strength under the surface—but the next few months will depend on broader market stability and consumer confidence.”

Private investment fell for the third straight quarter, dropping more than 11%, while consumer spending rose just 1.6%—held back by tighter credit, rising debt, and slowing job growth in sectors like hospitality and construction. Still, wage gains remained steady, and unemployment hovered near historic lows at 3.9%.

Beth Ann Bovino, chief U.S. economist at Oxford Economics, said the report shows “American industry is still competing, still exporting, and still growing,” but cautioned that “the larger concern is whether this performance can be sustained amid economic headwinds.”

Despite strong export figures, some economists warn that continued weakness in business investment could weigh on future growth if not offset by stronger consumer demand or renewed capital spending.

Markets responded with cautious optimism. The S&P 500 posted modest gains after the GDP report, while bond yields inched upward. Commodity markets, including agriculture, also saw movement as U.S. grain exports surged, boosting prices for farmers still recovering from prior supply shocks.

“The economy is doing well—but it’s walking a tightrope,” said Diane Swonk, chief economist at KPMG. “The question now is whether we keep climbing or lose our balance.”

With solid second-quarter growth in the books, attention now turns to whether the U.S. economy can maintain momentum in the face of evolving global and domestic challenges.