The U.S. economy showed unexpected strength in the second quarter of 2025, with gross domestic product (GDP) revised upward to an annualized growth rate of 3.3%, according to new data released Thursday. The figure beats the government’s initial estimate of 3.0% and outpaces economists’ forecast of 3.1%.

One of the most significant drivers of this growth was a sharp 30.3% decline in imports, paired with a 1.6% rise in consumer spending—a sign that households remain active despite lingering concerns about inflation and high borrowing costs. The strong rebound contrasts sharply with the 0.5% contraction recorded in the first quarter.

Inflation has also cooled, revised downward to 2% on a quarterly basis—closely aligning with the Federal Reserve’s long-standing target rate. On a year-over-year basis, inflation remains slightly elevated at 2.5%, but analysts view the trend as a positive sign for monetary policy stability.

Corporate America also delivered encouraging news, with profits rising by $65.5 billion in Q2, boosting market optimism.

Still, some economists warn against celebrating too early. Gregory Daco, chief economist at EY-Parthenon, noted that while headline numbers look strong, they may be masking underlying weaknesses in trade policy and domestic demand. “This growth is encouraging, but the foundation is not as solid as it appears,” Daco cautioned.

For now, however, the U.S. economy appears to be striking a balance between growth and inflation control, raising hopes for a more stable second half of 2025.