U.S. Second-Quarter GDP Growth Revised Up to 2.2%; Price Gauges Revised Lower

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Key points

Second-quarter U.S. GDP growth was revised up to a 2.2% annual rate from 1.5%, on stronger investment, consumer spending and government spending.
The PCE price index rose 5.0% and core PCE rose 3.3%, each revised down 0.3 percentage point; the GDP deflator was 6.1% against 6.4% previously.
Corporate profits rose $384.0 billion but were revised down $16.9 billion, while real final sales to private domestic purchasers increased 4.6%.

Real U.S. gross domestic product grew at a 2.2% annual rate in the second quarter of 2026, the Bureau of Economic Analysis said in its third estimate, a 0.7 percentage-point upward revision and above a 1.5% forecast. The agency also revised first-quarter growth up 0.4 percentage point to 2.5%.

The composition showed consumer spending, investment and exports contributing to growth, while imports, which subtract from GDP, increased. Private services-producing industries added 2.5% in real value added and goods-producing industries added 2.3%, while government contributed less than 0.1%. Real estate and rental and leasing, information, durable goods manufacturing, and finance and insurance were the leading industry contributors; transportation and warehousing, retail trade, and nondurable goods manufacturing were the largest offsets. Real gross output increased 5.0%.

Price pressures remained elevated even as several measures were revised down. The price index for gross domestic purchases rose 5.6%, 0.2 percentage point less than previously estimated, while the PCE price index rose 5.0% and core PCE rose 3.3%, each revised down 0.3 point. The GDP deflator was 6.1%, compared with 6.4% previously. For the first quarter, the gross domestic purchases price index was revised down 0.4 point to 3.2%, PCE to 4.2%, and core PCE to 3.9%.

Corporate profits from current production increased $384.0 billion in the second quarter, revised down $16.9 billion. Real gross domestic income rose 2.6%, revised up 0.4 point, and the average of GDP and GDI rose 2.4%, revised up 0.6 point. Real final sales to private domestic purchasers, the sum of consumer spending and gross private fixed investment, rose 4.6%, revised up 0.4 point. First-quarter profits were revised to a $63.4 billion increase, down $11.0 billion.

Finance and insurance was the leading contributor in New York and Delaware, while mining led declines in West Virginia and Wyoming.

Property income increased in all 50 states and the District of Columbia, with changes from 5.1% in Tennessee to 3.3% in Iowa, while transfer receipts rose in 48 states and fell in the District. For 2025, current-dollar personal consumption expenditures rose 5.3%, with PCE increasing in all 50 states and the District, from 7.0% in Florida to 4.2% in California; health care and housing and utilities were the leading contributors in most states, including Florida.

The release also incorporated the 2026 annual update of the national accounts, covering the first quarter of 2021 through the first quarter of 2026 and revising GDP, GDP by industry and GDI, among other components. The reference year remains 2017. The next release, the advance estimate for the third quarter of 2026, is scheduled for October 29.

The revision leaves second-quarter growth stronger than initially reported, but the composition was not uniform: profits were revised lower and government value added was negligible, while private domestic demand was the clearest source of upward momentum. Because the price index for gross domestic purchases and the PCE price index remain elevated even after downward revisions, the growth upgrade does not by itself establish an inflation downshift. A further decline in those gauges in the October 29 advance estimate for the third quarter would reinforce the softer-inflation reading; a rebound would leave the stronger-growth signal intact but with persistent price pressure.

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