The US economy grew at an annual rate of 2.2% between April and June, an unexpectedly strong revision driven by consumer spending and business investment, the Commerce Department reported on Wednesday.
The updated gross domestic product figure was higher than the department’s earlier estimate of 1.5%, although growth slowed from 2.5% in the first three months of the year. Economists had expected little or no change to the initial second-quarter estimate.
Consumer spending, which accounts for about 70% of US economic activity, rose at a 3.8% annual rate. That was a marked improvement on the 0.7% pace recorded in the January-to-March quarter.
Spending has been supported by a strong stock market, reflecting enthusiasm about the prospects for artificial intelligence. Rising share prices have increased the wealth of higher-income investors, giving them more money to spend.
AI investment helps drive US economic growth
Business investment excluding housing increased at a 9% annual rate in the second quarter, reflecting the boom in AI-related investment. A measure of underlying economic strength, which excludes volatile government spending and trade, grew by 4.6%, up from 1.8% in the first quarter.
Imports nevertheless weighed heavily on the headline figure. They rose at a 12.6% annual rate, partly because of increased shipments of computer chips and other products supporting AI investment, reducing second-quarter growth by nearly 1.7 percentage points.
Michael Pearce, chief US economist at Oxford Economics, said: “The economy is increasingly reliant on AI gains and the corresponding wealth effects boosting higher-income households’ spending power to fuel recent growth. The economy remains sensitive to a sudden reversal of optimism on AI.”
The economy has remained resilient despite fighting with Iran and the resulting rise in energy prices. Investment in housing also increased by 2.8%, its first rise since the end of 2024, although the housing market has been depressed by high mortgage rates.
Wednesday’s figures were the Commerce Department’s final estimate of second-quarter GDP growth. The first estimate for the third quarter is due on October 29.
