[SPEAKER_01]: This is a news.com newsflash. [SPEAKER_00]: News.com has learned that gross domestic product, GDP, expanded at an annual rate of three percent in April, May, and June, marking a reversal from a half a percent contraction reported in the first three months of the year. [SPEAKER_00]: Economist caution, however, that the rebound was shaped in part by shifting trade patterns linked to President Donald Trump's tariffs, and underlying growth trends remain slower than the previous year.
[SPEAKER_00]: The headline GDP figures were significantly influenced by changes in international trade flows. [SPEAKER_00]: Import searched early in a year, as U.S. [SPEAKER_00]: businesses accelerated imports to stock up on foreign goods ahead of planned tariff increases. [SPEAKER_00]: Because imports are subtracted from GDP calculations, that search depressed the first quarter reading.
[SPEAKER_00]: In the spring, imports dropped as new double-digit tariffs took effect, reducing demand for foreign goods. [SPEAKER_00]: This decline in imports made the second quarter GDP figure appear stronger, even though exports also fell during the period. [SPEAKER_00]: Economists know that while the trade-related shifts improved the statistical reading for the quarter, they did not necessarily signal an improvement in domestic demand.
[SPEAKER_00]: Consumer spending, which is the biggest driver of economic activity, increased at a one point four percent annual rate in the spring, a pace slower than in previous periods, reflecting the impact of higher prices on household budgets. [SPEAKER_00]: Over the same period, both business investment and residential construction decline, while expenditures by state and local governments moved higher, providing a modest boost to overall growth.
[SPEAKER_00]: Samuel Tunes, Chief U.S. [SPEAKER_00]: economist at Pantheon macroeconomics, is projecting annualized GDP growth of only about one percent in the second half of the year, as consumers wrestled with increased prices for imported goods and businesses respond to uncertainty over the Trump administration's economic policies. [SPEAKER_00]: We expect the economy to lose more momentum to upset.
[SPEAKER_00]: When averaging the first two quarters of the year, the economy grew at an annual rate of roughly one point two five percent, marking a clear slowdown from the nearly three percent growth reported in each of the past two years. [SPEAKER_00]: A key measure that economists watch for underlying demand, real-final sales to private domestic purchasers, which excludes trade and government spending, rose at just a one point two percent annual rate in the second quarter.
[SPEAKER_00]: That compares to a one point nine percent rate in the first quarter, indicating that private sector demand has cooled. [SPEAKER_01]: Now it's snowing. [SPEAKER_01]: Unfilter. [SPEAKER_01]: Unfilter. [SPEAKER_01]: News.com News.com News