The U.S. second-quarter GDP growth rate was revised up to 3.3%, with business investment and trade as the main drivers

According to the Zhitong Finance APP, the U.S. Bureau of Economic Analysis released its second revision on Thursday, showing that the U.S. real GDP grew at an annualized rate of 3.3% in the second quarter, slightly up from the initial estimate of 3%. This growth rate is mainly attributed to a rebound in business investment and strong trade performance, reflecting a gradual stabilization of the economy after fluctuations in the first quarter.

Business investment has become an important support point, continuing to grow by 5.7% in the second quarter after a surge in the first quarter, significantly higher than the initial estimate of 1.9%. The upward adjustment in transportation equipment investment and the strongest growth in intellectual property product investment in four years were key factors driving the revision. In the previous quarter, GDP contracted for the first time since 2022 as companies accelerated imports ahead of tariff adjustments, but current data indicate that the economy is adapting to the new trade policy environment.

Gross Domestic Income (GDI), another core indicator of economic activity, surged by 4.8% quarter-on-quarter in the second quarter, far exceeding the 0.2% slight increase in the first quarter. The difference between GDI and GDP lies in the former focusing on income and costs in the production phase, while the latter measures the value of final goods and services. The data from both indicators corroborate the increased activity in the economy.

Corporate profits also performed well, growing by 1.7% in the second quarter, reversing the largest decline since 2020 in the first quarter. The proportion of after-tax profits of non-financial corporations to total value added remained at 15.7%, well above the average level from the 1950s to pre-pandemic, indicating that companies still have strong pricing power. However, how tariff costs are passed on becomes a key variable—if companies choose to raise prices instead of absorbing costs, it may exacerbate inflationary pressures.

Trade performance has become the biggest highlight, with net exports contributing nearly 5 percentage points to GDP, a historical high. This data involves a special calculation logic: goods and services not produced in the U.S. are included in GDP during consumption, but the production phase must be deducted from the total. Trade had previously dragged down the economy in the first quarter, but a reversal occurred in the second quarter.

Consumer spending showed a moderate recovery, with consumer expenditures growing at an annualized rate of 1.6% in the second quarter, higher than the initial estimate of 1.4%, but still below the long-term trend. The consumption growth rate in the first quarter had reached a new low since the pandemic, and current data indicate that resident demand is slowly recovering. The more closely watched "final sales" indicator (excluding trade and inventory fluctuations) grew by 1.9%, showing that the foundation of domestic demand still needs to be solidified.

Retailers' attitudes showed subtle differentiation. Walmart raised its full-year sales forecast, stating that consumer shopping habits have not shown significant changes; Home Depot executives emphasized that customers' financial conditions are healthy; Target's sales still declined year-on-year but exceeded market expectations.

However, there are widespread concerns in the industry that current sales data may not fully reflect the impact of tariffs—most goods in the second quarter were imported before the tariffs took effect, and the future cost pass-through effects may gradually become apparent. Fitch Ratings pointed out that the combination of tariffs and market uncertainty may suppress consumer confidence and raise inflation expectations It is worth mentioning that the core PCE index, which the Federal Reserve is focused on, rose by 2.5% in the second quarter, unchanged from the initial value. The PCE data for July will be released on Friday, providing the latest clues for the economic trends in the third quarter.

Federal Reserve Chairman Jerome Powell stated at the Jackson Hole meeting that the impact of tariffs on prices has "become apparent," but considering the risks in the labor market, there is still room for a rate cut in September. The unemployment claims data released during the same period showed a decrease in the number of people continuing to claim unemployment benefits for the week ending August 16, adding positive signals for the non-farm payroll data for August, which will be released next week.

Overall, the U.S. economy is showing resilience driven by trade and investment, but the uncertainty of tariff policies, inflation stickiness, and the sustainability of consumer momentum still need to be observed. The Federal Reserve will continue to cautiously adjust its policy path while balancing growth and inflation risks