U.S. Economy Posts Strong 2.2% Growth in Second Quarter as AI Spending and Investment Increases

WASHINGTON (AP) — The U.S. economy grew a solid 2.2% from April to June. consumer spending and business investment increased.

Growth in gross domestic product — the nation’s output of goods and services — slowed 2.5% between January and March, the Commerce Department reported Wednesday. The second quarter growth was an improvement on the ministry’s previous estimate of 1.5% – a surprise to economists who had expected little or no change in the GDP figures.

Consumer spending — which accounts for about 70% of U.S. economic activity — grew at a healthy annual rate of 3.8%, up from 0.7% in the January-March period. Spending was supported by a strong stock market, reflecting enthusiasm over the outlook for artificial intelligence and that makes wealthy investors richer and gives them more money to buy things.

Overall growth was held back by imports. They are subtracted from growth because GDP is supposed to take into account only national production. Imports grew at an annual rate of 12.6% from April to June, partly due to a surge in shipments of computer chips and other products supporting investments in artificial intelligence, and shaved nearly 1.7 percentage points off second-quarter growth.

The U.S. economy has been surprisingly resilient in the face of the fighting with Iran and the surge in energy prices it has caused.

Business investment, excluding housing, rose 9% in the second quarter, reflecting the boom in AI investment. And a measure of the economy’s underlying strength – which excludes volatile government spending and trade figures – saw strong growth of 4.6%, up from 1.8% in the first quarter.

“The economy is increasingly reliant on advances in AI and corresponding wealth effects, which boost the purchasing power of higher-income households to fuel recent growth,” said Michael Pearce, chief U.S. economist at Oxford Economics. “The economy remains susceptible to a sudden reversal of optimism about AI.”

Investment in housing increased by 2.8%, for the first time since the end of 2024. The housing market was depressed by high mortgage rates.

Wednesday’s report was the last of three Commerce Department estimates of second-quarter GDP growth. The first look at third-quarter growth is expected on October 29.