Q2 GDP Growth Revised Higher Amid Robust Consumer Spending

The U.S. economy expanded at a stronger rate than previously estimated in the second quarter, as robust consumer spending and private investment resulted in an unexpected, yet significant upward revision of real GDP growth. In its third and final estimate, the U.S. Bureau of Economic Analysis (BEA) reported that real GDP had increased at an annual rate of 2.2 percent between April and June, up from a previous estimate of 1.5 percent.

The revision, which surprised analysts who had expected little to no change compared to the first two estimates, was driven by upward adjustments to private investment, government spending and personal consumption expenditure, with the latter particularly surprising given that inflation remains elevated, gas prices are near historic highs and consumer sentiment is severely depressed. According to the BEA, personal consumption expenditure, which accounts for roughly two thirds of GDP, grew at an annual rate of 3.8 percent, up from a previous estimate of 3.4 percent and from just 0.7 percent in Q1 2026. Nonresidential investment increased at a rate of 9 percent in the second quarter, largely driven by the massive buildout of AI data centers. Real final sales to private domestic purchasers, a popular gauge for the health of the economy that excludes government spending and foreign trade and is sometimes referred to as “core GDP”, increased at an annual rate of 4.6 percent, suggesting that the U.S. economy is actually humming along, despite many Americans struggling to cope with high prices and stagnant real wages.

As our chart shows, consumer spending was the biggest driver of the GDP growth in the second quarter, contributing 2.51 percentage points to overall growth. Private investment and exports also increased, contributing 0.82 and 0.56 percentage points to the total, respectively. Imports, which are a subtraction in the calculation of GDP, surged at an annual rate of 12.6 percent in Q2, shaving 1.66 percentage points off real GDP growth for the quarter.