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Second-Quarter 2025 GDP, Highlights Show Advance Estimates

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

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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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