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The U.S. economy roared back to life in the second quarter, with GDP surging 3% after shrinking just months before. This strong bounce shows American businesses and families are adapting to challenges like tariffs and global uncertainty. White House economic advisor Kevin Hassett called the numbers “beautiful,” stating they prove the economy remains resilient despite liberal attacks on growth policies.
Consumer spending jumped 1.4%, driving the recovery. Americans spent more on goods despite inflation fears, signaling confidence in the jobs market and their own pocketbooks. Government spending also climbed, reversing a prior dip as federal programs kicked back into gear.
But not all news was perfect. Business investment slowed sharply, with drops in homebuilding and equipment purchases. Some blame loud calls for higher interest rates from the Federal Reserve, which could strangle growth. Hassett warned the Fed should keep rate hikes on ice after this mixed report.
Imports crashed nearly 30% compared to last quarter’s panic buying. Companies had stocked up fearing Trump’s trade policies, only to slash orders later. Experts say this wild swing highlights how trade deals can roil markets, but Hassett insists it’s short-term noise.
Workers might be losing momentum. “Final sales to domestic buyers” grew just 1.2%—the weakest since 2022. This quiet indicator tells the real story of whether regular Americans are driving demand. Trump policies focused on workers, but this number needs watching.
The Fed faces big choices now. Rates are already high after last year’s hikes. More tightening could cool growth when investment stops rising and exports shrink. Hassett argues the Fed should track jobs, not just inflation, to keep the economic engine running.
Critics claim tariffs caused export drops and supply chain chaos. The report shows exports fell 1.8%, the worst hit since 2023. Hassett counters that renegotiated trade deals will pay off long-term, even with short-term pain.
The recovery isn’t guaranteed. Next quarter’s data will test if consumers keep spending and businesses restart investing. President Trump’s policies won this round, but staying vigilant against overreach by regulators and the Fed remains key.
