The U.S economy swings back to growth as consumer spending rises despite TRUMP’s tariffs

Wednesday, July 30, 2025 - The U.S. economy rebounded in the second quarter amid higher consumer spending and a sharp drop in imports, prompting President Donald Trump to take aim at the chair of the Federal Reserve again.

Gross domestic product (GDP) jumped 3% between April and June on an annualized basis, according to the Bureau of Economic Analysis (BEA), up from a surprise 0.5% fall between January and March.

The increase reflected a 30.3% slump in imports compared to the first quarter, when companies rushed to get goods into the country ahead of Trump’s tariffs, which prompted a 37.9% surge during the period. Imports count against a country’s GDP.

The second quarter period included the president’s April 2 “liberation day” announcement, which sparked months of negotiations with countries around the world on potential trade deals.

Consumer spending, which accounts for more than two-thirds of economic activity, rose 1.4% for the period, up from a 0.5% increase in the prior quarter. 

James Knightley, chief international economist at ING Bank, said the data still showed consumers “are nervous about the outlook,” after growth in consumer spending was still lower than at the same point in 2024.

“The trade swings are going to keep distorting the headline growth rate through much of this year due to the evolving nature of trade policy,” he added.

Nonetheless, the president used the data to chide Jerome Powell, chair of the Federal Reserve, ahead of a decision on interest rates later in the day, reprising his “Too Late” nickname for the central bank boss and urging him to cut rates.

Trump wrote on Truth Social that the figure was "WAY BETTER THAN EXPECTED! 'Too Late' MUST NOW LOWER THE RATE. No Inflation! Let people buy, and refinance, their homes!"

It comes after Trump once again floated firing Powell earlier in July, a move that rattled bond markets and drew rare public warnings from big bank CEOs about the risks of undermining central bank independence.

The Fed typically brings down interest rates when the economy is struggling and raises them to combat inflation. 

While the Fed cut rates three times in 2024, the bank has held off on committing one way or the other so far in 2025, saying it wants to assess the impact of tariffs and other policies, including tax cuts, on the broader economy.