The U.S. economy grew at a 2.2 percent annual rate from April through June, the Commerce Department said on Wednesday, revising its estimate up from 1.5 percent in a change that economists had not seen coming.
The new figure was the government’s third and final reading on second-quarter gross domestic product. It showed growth slowing from a 2.5 percent pace in the first three months of the year but holding up despite fighting with Iran and the energy price spike that came with it. Economists surveyed ahead of the release had expected little or no change.
Consumer spending, which accounts for about 70 percent of U.S. economic activity, rose at a 3.8 percent annual pace, up sharply from 0.7 percent in the first quarter. Spending has been buoyed by a strong stock market driven by enthusiasm for artificial intelligence, which has enriched wealthy investors and left them with more money to spend.
The headline number would have been higher but for imports, which are subtracted from GDP because it counts only domestic production. Imports climbed at a 12.6 percent annual pace, partly on a surge of computer chips and other products feeding the artificial intelligence buildout, and shaved nearly 1.7 percentage points off growth.
Business investment, excluding housing, rose at a 9 percent rate, and a measure of the economy’s underlying strength that strips out volatile government spending and trade figures grew 4.6 percent, up from 1.8 percent in the first quarter.
“The economy is increasingly reliant on AI gains and the corresponding wealth effects boosting higher-income households’ spending power to fuel recent growth,” said Michael Pearce, chief U.S. economist at Oxford Economics. “The economy remains sensitive to a sudden reversal of optimism on AI.”
Housing investment rose 2.8 percent, its first increase since the end of 2024, in a market long weighed down by high mortgage rates.
The first look at third-quarter growth is due Oct. 29.