Second-quarter growth revised up to 2.2% as consumer confidence slides

The US economy grew at an annualised 2.2 percent in the second quarter, an upgrade to the previous estimate¹. The figure came in the last of three Commerce Department estimates of second-quarter GDP growth¹, and was revised higher from both the advance and second estimates according to the Bureau of Economic Analysis third estimate³. The Wall Street Journal reported the revision as taking growth to 2.2 percent from a prior estimate of 1.5 percent⁴.

Economists polled by Reuters had expected GDP growth would be unrevised², and Reuters attributed the upgrade to robust consumer spending².

Spending data pointed the same way. Inflation-adjusted US consumer spending rose the most in 17 months^5,6, with goods spending up 1.3 percent, reversing a 0.5 percent decline in the prior month^5,6.

Why it matters to investors

Sentiment is moving in the opposite direction. The Conference Board index registered 81.9 against a consensus of 89.2 and a previous reading of 88.6⁹, which Econbrowser described as three standard deviations below its mean⁹.

Consumer sentiment tumbled to a 12-year low this month on the Conference Board measure⁷, and a separate account put the reading at the lowest level since 2014⁸. Equities took their cue from the output data rather than the survey: the Journal filed the GDP revision under signs of strength in the US economy powering stocks⁴.

The two series disagree about the same household. Spending accelerated to its fastest pace in 17 months⁶ while confidence fell to a multi-year low^7,8, a combination that leaves both a soft-landing and a stall reading defensible on current evidence.

What to watch

Whether spending follows sentiment down is the central question. The confidence series is now far below consensus expectations⁹, and the reference points Econbrowser used for its comparison run from January 2021 through February 2025⁹, a window that predates the current energy shock.

For policy, the revision cuts against the case for easing: stronger measured growth^1,3 and accelerating consumption⁵ are the conditions under which the debate stays on the timing of further tightening rather than relief. Home builders framed the confidence drop explicitly around economic conditions and Fed rate hikes weighing on sentiment and the labour market outlook⁸.

The next monthly spending and confidence prints will show which series was the leading indicator^6,7.