The US Bureau of Economic Analysis released its second estimate of US economic growth in the second quarter, which showed the US economy grew at a faster pace than the initial estimate. Trade activity, which dragged down growth in the first quarter, was a key contributor to higher growth in the second quarter. The US economy has demonstrated its relative resiliency despite escalating trade tensions over the quarter. Looking at the US real estate market, a separate report showed that home sales declined in July.

• A second estimate showed the US economy expanded at an annualized pace of 3.3% over the second quarter of 2025. This was revised higher from the 3.0% rate of growth in the first estimate. US gross domestic product shrank by 0.5% in the first quarter.
• Business investment and consumer spending were revised higher in this second estimate, contributing to the higher rate of growth.
• Consumer spending rose by 1.6% over the quarter, according to the second estimate. The US consumer remains relatively resilient despite still tight financial conditions and economic uncertainty, particularly surrounding the labour market.
• Net exports positively contributed to growth. Imports fell by 29.8% amid tariffs with key trade partners.
• The National Association of Realtors reported that pending home sales in the US declined by 0.4% in July. This marked its second straight decline. High home prices and elevated mortgage rates continue to weigh on demand.

The US economy has remained relatively resilient despite extensive trade disruptions and persistently restrictive financial conditions. However, relatively slower growth is likely to persist in large part due to trade tensions. This might open the door for the US Federal Reserve Board to cut interest rates at its next meeting. Trade between the US and Canada has been impacted by tariffs. Canada recently removed retaliatory tariffs in a move that could help spark a new trade deal between the neighbouring nations.

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