Economic growth beats expectations while labor market shows resilience
The U.S. economy expanded at a stronger-than-expected pace in the second quarter of 2025, with preliminary gross domestic product (GDP) increasing at an annualized rate of 3.3%. At the same time, initial unemployment claims fell to 229,000, signaling that the labor market remains steady.
GDP growth outpaces forecasts
The 3.3% GDP increase marked a clear improvement from the previous quarter’s contraction and exceeded forecasts that had called for growth around 3.0%. Economists highlight that consumer spending and business investment continued to drive momentum, while service-sector activity remained robust.
“This report shows the U.S. economy is still running stronger than many anticipated,” said BITX market economist. “A 3.3% reading is a sign that demand hasn’t cooled as quickly as some expected, despite higher borrowing costs.”
Related :U.S. Jobless Claims Rise as Labor Market Shows Signs of Strain
Jobless claims decline again
The 229,000 initial jobless claims came in below both last week’s 235,000 and market expectations of 231,000. The decline underscores a labor market that continues to hold firm even as certain sectors adjust to slower hiring.
The dual release of stronger GDP and lower jobless claims is likely to influence expectations for the Federal Reserve’s policy path. A faster growth rate and a resilient jobs market reduce pressure on the Fed to cut interest rates in the near term.
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