The U.S. economy is looking pretty strong again—or at least it was last quarter. Real GDP growth was revised in the second quarter to 3.8%, a sharp rebound from the -0.6% decline in the previous quarter.
As a reminder, real GDP is a measure of inflation-adjusted gross domestic product. Which, to put it simply, is the broadest metric we have for measuring how much “stuff” we produce in this country.
That’s why seeing this measure get revised higher is a pretty big deal for investors. There has been some anxiety floating around in regard to the slowing labor market, so to see that economic growth is still holding up is quite encouraging.
Something I also found interesting from the BEA report is that real GDP was revised to show that it grew at an average annual pace of 2.4% from 2019 through 2024. This basically reinforces the idea that the economy recovered quickly from the pandemic shock of 2020 and has since shifted into a steadier, more trend-like state of growth—even if inflation remains a concern.
So, the bottom line is that the latest GDP revision should help ease some of the anxiety that was brought about by the recently weak jobs report numbers. Sure, hiring might still be stuck in a low gear, but at least economic growth remains resilient.
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