GDP GROWTH
The nation’s economy grew at a stronger-than-expected rate in the second quarter due to a drop in imports and healthy consumer spending, but there are weaknesses in business investment and home sales.

The Commerce Department reported that the U.S. gross domestic product rose at a seasonally and inflation-adjusted 3% rate in the second quarter. That was a reversal from the first quarter in which the economy shrank at a 0.5% annual rate as U.S. businesses stocked up on imports ahead of expected tariffs imposed by the Trump administration. Economists surveyed expected second-quarter growth of 2.3%. Despite the return to growth in the second quarter, there was weakness in business investment after Q1’s double-digit expansion. Residential investment, which includes homebuilding and home sales, contracted for a second straight quarter. READ MORE>

EMPLOYMENT
Job gains in the second quarter were better than expected. There were upward revisions for April and May by the Labor Department and 147,000 positions were added in June, more than the 110,000-job estimate and signaling a generally healthy economy.

“The solid June jobs report confirms that the labor market remains resolute and slams the door shut on a July rate cut,” since the Federal Reserve is unlikely to reduce interest rates when the economy is growing and jobs are being created, said Jeff Schulze, head of economic and market strategy at ClearBridge Investments. READ MORE>

MONETARY POLICY
The Federal Reserve held interest rates steady in the second quarter and signaled that, while still planning on two cuts this year, it was holding off on the next rate reduction until it determined whether the new tariffs affected prices and hiring and fueled inflation.

“Unless we see a really, really rapid deterioration in the labor market we won’t see a cut until September, and maybe not even then,” Fed Chair Jerome Powell told reporters after the Fed’s recent quarterly report. READ MORE>

GLOBAL ECONOMY
The swift escalation of trade tensions and uncertainty triggered by the United States’ new tariff program are expected to suppress global economic activity for the next 18 months.

The International Monetary Fund has reduced its expectations in its April update for global growth to 2.8% this year and 3% in 2026 from the 3.3% previously forecast for this year and next. The World Bank said it expects growth to weaken to 2.3% in 2025 “with deceleration in most economies relative to last year.” READ MORE>