U.S. Surprises with 3% Growth in Q2… Imports Plummet

GDP rebounds after one quarter

Consumer spending up 1.4%… Slower corporate investment

Private sector employment up 104,000 in July

Fed expected to keep benchmark rate unchanged

Trump pressures Powell to cut rates

"High real tariff rates may weaken growth in the second half"

The U.S. economy posted a surprise growth rate of 3% in the second quarter of this year. In the first quarter, imports surged ahead of the Donald Trump administration’s tariff imposition, resulting in negative growth, but growth returned in the second quarter.

The U.S. Department of Commerce announced on the 30th (local time) that the U.S. gross domestic product (GDP) growth rate (advance estimate) for Q2 came in at 3.0% (annualized rate compared to the previous quarter). This figure far exceeded the 2.4% consensus forecasted by experts polled by Reuters. Previously, Q1 GDP registered -0.5%, showing negative growth, but rebounded to positive territory in just one quarter. The turnaround was analyzed to result from a significant decrease in imports and a moderate recovery in consumer spending in Q2.

A sharp fall in imports caused by temporary inventory adjustments prompted by deferred tariff imposition under the Trump administration was the main driver behind the recovery in growth. Unlike South Korea, the U.S. releases GDP statistics as annualized, seasonally adjusted growth rates compared to the previous quarter. In GDP statistics, an increase in exports supports higher growth rates, while an increase in imports has the opposite effect. Excluding recent volatility related to tariffs, economic activity in Q2 generally rebounded at a more moderate pace. Consumer spending, which accounts for two-thirds of GDP, rose 1.4%, while corporate investment growth slowed. According to Reuters, economists commented that real U.S. tariff rates are at their highest levels since the 1930s and projected sluggish economic growth in the U.S. for the second half of the year.

Private sector employment also improved in July. Automatic Data Processing (ADP), a U.S. employment information firm, said private companies increased employment by 104,000 in July compared to the previous month. In June, private sector jobs had decreased by 23,000 from the prior month, so there was a rebound in just one month. The figure also far exceeded Dow Jones’ consensus estimate of 64,000. By industry, sectors such as construction, finance, and service—including leisure and hospitality—added 74,000 jobs, contributing to the employment rebound. Nela Richardson, ADP's chief economist, said of this month's figures, "They point to a healthy economy," adding, "Employers are optimistic that consumers, the backbone of the economy, will maintain their resilience." The U.S. Department of Labor will release its employment report on August 1.

The market expects the Federal Reserve to keep the benchmark interest rate unchanged at 4.25~4.50% after the two-day Federal Open Market Committee (FOMC) meeting concluding on the 30th. On the day the higher-than-expected Q2 GDP growth figure was announced, President Trump once again urged Fed Chair Jerome Powell to cut the key interest rate. He wrote on Truth Social, "Q2 GDP just came out," and "3% is much better than expected."

Sangmi Ahn, Reporter saramin@hankyung.com