U.S. Economic Growth: More Illusion Than Reality?

The U.S. economy showed signs of recovery with a 3% annualized growth in Q2, largely due to declining imports affecting the trade deficit. However, domestic demand and consumer spending grew slowly, indicating underlying weaknesses. Economists remain cautious about the economic outlook amid trade policy uncertainties and potential further interest rate adjustments.

The U.S. economy appears to have rebounded in the second quarter with an unexpected annualized growth rate of 3%, according to the Commerce Department's report. Despite this promising figure, experts highlight that the decline in imports, rather than robust domestic demand, primarily drove this growth.

Consumer spending, a significant economic driver, experienced only moderate growth, while business investments in equipment significantly slowed. Meanwhile, residential investments contracted for the second consecutive quarter, amid an atmosphere of uncertain trade policies and cautious business planning.

Though President Trump has implemented wide-ranging tariffs, the overall economic picture remains mixed. Economists project modest growth moving forward, with the Federal Reserve maintaining interest rates amid external pressures. The economic landscape continues to be shaped by ongoing trade negotiations and fiscal policies.

(With inputs from agencies.)