WASHINGTON (AP) — The nation’s economy rebounded this spring from a first-quarter downturn, according to new federal government figures.

In an upgrade from its first estimate in July, the Commerce Department last week said that the country’s
gross domestic product — the nation’s output of goods and services — expanded at a 3.3 percent annual pace from April through June after shrinking 0.5 percent in the first three months of 2025. The department had initially estimated second-quarter growth at 3 percent.

The first-quarter GDP drop, the first retreat of the economy in three years, was mainly caused by a surge in imports — which are subtracted from GDP — as businesses scrambled to bring in foreign goods ahead of President Donald Trump’s new tariffs.

That trend reversed as expected in the second quarter: Imports fell at a 29.8 percent pace, boosting April-June growth by more than 5 percentage points.

The Commerce Department reported that consumer spending and private investment were a bit stronger in the second quarter than it had first estimated.

Consumer spending, which accounts for about 70 percent of GDP, grew at a 1.6 percent annual pace, better than 0.5 percent in the first quarter and the 1.4 percent the government initially estimated for the second.

Even with an upward revision, private investment dropped at a 13.8 percent annual pace from April through June. That would be biggest drop since the second quarter of 2020 at the height of the coronavirus pandemic.

A reduction in private inventories cut almost 3.3 percentage points off second-quarter GDP growth. Spending and investment by the federal government fell at a 4.7 percent annual clip on top of a 4.6 percent drop in the first quarter.

A category within the GDP data that measures the economy’s underlying strength came in stronger than first reported, growing 1.9 percent from April-June, same as in the first quarter. That category includes consumer spending and private investment, but excludes volatile items such as exports, inventories and government spending.

Since returning to the White House, Trump has slapped double-digit taxes on imports from almost every trading country and targeted specific products for tariffs, too, including steel, aluminum and autos.

Trump sees tariffs as a way to protect American industry, lure factories back to the United States and to help pay for the tax cuts he signed into law July 4.

Many mainstream economists say that his tariffs will damage the economy, raising costs and making protected American companies less efficient. They note that tariffs are paid by importers in the United States, who try to pass along the cost to their customers via higher prices. Therefore, tariffs can be inflationary — though their impact so far has been modest.

Heather Long, chief economist at Navy Federal Credit Union, said the resilience of the job market — the government also reported that fewer people applied last week for unemployment benefits — is “giving people confidence to open their wallets for the basics and some little splurges.’’

She also expected the economy to stay in a “slower speed mode with spending and growth around 1.5 percent as the tariffs become more visible to American consumers.”