The U.S. economy likely rebounded in the second quarter of 2025, but early indicators suggest the recovery may mask underlying weaknesses, according to economists and preliminary data.
Analysts expect GDP to show modest growth after a sluggish first quarter, driven by a rebound in consumer spending and a slight pickup in business investment. However, beneath the headline figures, several key components—such as housing activity, manufacturing output, and real wage growth—remain under pressure.
“The top-line number may look respectable, but once you strip away the temporary boosts, the foundation is still shaky,” said one senior economist at a Wall Street bank.
Government spending and inventory restocking are also expected to contribute to the Q2 uptick, but these are not seen as sustainable drivers of long-term growth. Consumer confidence has remained fragile amid persistent inflation and elevated interest rates.
The Commerce Department is scheduled to release the official GDP report later this week. Markets are watching closely for signs of whether the Federal Reserve will maintain its current policy stance or begin considering rate cuts later in the year.
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