02:34 PM EDT, 07/30/2025 (MT Newswires) -- The US economy rebounded more than expected in the second quarter as imports plunged, while analysts continued to monitor potential impacts of tariffs in the second half of the year.

Real gross domestic product in the world's largest economy increased at an annual rate of 3% in the June quarter, according to an advance estimate released Wednesday by the Bureau of Economic Analysis. The consensus was for a 2.6% growth in a survey compiled by Bloomberg.

The GDP expansion followed a 0.5% contraction in the March quarter.

Imports slumped 30% in the second quarter, while exports fell 1.8%. Consumer spending growth accelerated to 1.4% from the first quarter's 0.5% pace.

"The details show that net trade was the main driver of growth as imports snapped back lower following their first-quarter surge when companies sought to beat the introduction of tariffs," said James Knightley, chief international economist at ING. "This meant that net trade contributed 5 (percentage points) to the headline growth rate, but a run-down in inventories, as companies put their first-quarter imports to work, subtracted 3.2 (percentage points)."

After announcing sweeping new tariffs on imports in April, US President Donald Trump declared a 90-day pause on certain duties for non-retaliating countries. The US administration has set an Aug. 1 deadline for countries to negotiate deals with Washington or face higher tariffs.

The US recently reached trade deals with the European Union, Japan, the Philippines and Indonesia. US and Chinese officials wrapped up their two-day trade talks in Sweden on Tuesday without announcing an extension to the temporary suspension of tariffs on each other's goods.

"Consumers are nervous about the outlook, construction is struggling and business investment has lost momentum," Knightley wrote.

The personal consumption expenditures price index advanced by 2.1% in the second quarter, compared with a 3.7% rise the quarter prior, the BEA's data showed. The core PCE index, which is the Federal Reserve's preferred inflation metric and excludes volatile food and energy prices, decelerated to 2.5% from 3.5%.

"With inflationary pressures likely to heat-up over the coming months alongside some expected softening in the labor market, the backdrop for consumer spending is looking increasingly fragile," Thomas Feltmate, senior economist at TD Economics, said in a repot.

The brokerage is projecting GDP growth of around 1% in the third quarter.

Demand has been cooling over the past two quarters, and growth now appears to be slipping below its longer-term potential pace, said Scott Anderson, chief US economist at BMO.