WASHINGTON (AP) — The U.S. economy expanded at a surprising 3% annual pace from April through June, bouncing back at least temporarily from a first-quarter drop that reflected disruptions from President Donald Trump’s trade wars.
Still, details of the report suggested that U.S. consumers and businesses are wary about the economic uncertainty arising from Trump's radical campaign to restructure the American economy by slapping big taxes — tariffs — on imports from around the world.
“Headline numbers are hiding the economy’s true performance, which is slowing as tariffs take a bite out of activity,” Nationwide chief economist Kathy Bostjancic wrote.
America gross domestic product — the nation’s output of goods and services — rebounded after falling at a 0.5% clip from January through March, the Commerce Department reported Wednesday. The first-quarter drop, the first retreat of the U.S. economy in three years, was mainly caused by a surge in imports — which are subtracted from GDP — as businesses scrambled to bring in foreign goods ahead of Trump’s tariffs.
The bounceback was expected but its strength was a surprise: Economists had forecast 2% growth from April through June.
From April through June, a drop in imports — the biggest since the COVID-19 outbreak — added more than 5 percentage points to growth. Consumer spending registered lackluster growth of 1.4%, though it was an improvement over the first quarter's 0.5%.
Private investment fell at a 15.6% annual pace, biggest drop since COVID-19 slammed the economy. A drop in inventories — as businesses worked down goods they'd stockpiled in the first quarter — shaved 3.2 percentage points off second-quarter growth.
A category within the GDP data that measures the economy’s underlying strength weakened in the second quarter, expanding at a 1.2% annual pace, down from 1.9% from January through March and the weakest since the end of 2022. This category includes consumer spending and private investment but excludes volatile items like exports, inventories and government spending.
Federal government spending and investment fell at a 3.7% annual rate on top of a 4.6% drop in the first quarter.
Wednesday’s GDP report showed inflationary pressure easing in the second quarter. The Federal Reserve’s favored inflation gauge – the personal consumption expenditures, or PCE, price index – rose at an annual rate of 2.1% in the second quarter, down from 3.7% in the first. Stripping out volatile food and energy prices, so-called core PCE inflation rose 2.5%, down from 3.5% in the first quarter.
On his Truth Social media platform, Trump heralded the GDP gain and stepped up his pressure on the Federal Reserve to cut interest rates: "2Q GDP JUST OUT: 3%, WAY BETTER THAN EXPECTED! “Too Late” MUST NOW LOWER THE RATE. No Inflation! Let people buy, and refinance, their homes!''
Trump sees tariffs as a way to protect American industry, lure factories back to the United States and help pay for the massive tax cuts he signed into law July 4.
But mainstream economists — viewed with disdain by Trump and his advisers — say that his tariffs will damage the economy, raising costs and making protected U.S. companies less efficient. They note that tariffs are paid by importers in the United States, who try to pass along the cost to their customers via higher prices. Therefore, tariffs can be inflationary — though their impact so far has been modest.
FILE - A sheet of new $1 bills is seen, Nov. 15, 2017, at the Bureau of Engraving and Printing in Washington. (AP Photo/Jacquelyn Martin, File)
MADRID (AP) — Venezuelans living in Spain are watching the events unfold back home with a mix of awe, joy and fear.
Some 600,000 Venezuelans live in Spain, home to the largest population anywhere outside the Americas. Many fled political persecution and violence but also the country’s collapsing economy.
A majority live in the capital, Madrid, working in hospitals, restaurants, cafes, nursing homes and elsewhere. While some Venezuelan migrants have established deep roots and lives in the Iberian nation, others have just arrived.
Here is what three of them had to say about the future of Venezuela since U.S. forces deposed Nicolás Maduro.
David Vallenilla woke up to text messages from a cousin on Jan. 3 informing him “that they invaded Venezuela.” The 65-year-old from Caracas lives alone in a tidy apartment in the south of Madrid with two Daschunds and a handful of birds. He was in disbelief.
“In that moment, I wanted certainty,” Vallenilla said, “certainty about what they were telling me.”
In June 2017, Vallenilla’s son, a 22-year-old nursing student in Caracas named David José, was shot point-blank by a Venezuelan soldier after taking part in a protest near a military air base in the capital. He later died from his injuries. Video footage of the incident was widely publicized, turning his son’s death into an emblematic case of the Maduro government’s repression against protesters that year.
After demanding answers for his son’s death, Vallenilla, too, started receiving threats and decided two years later to move to Spain with the help of a nongovernmental organization.
On the day of Maduro’s capture, Vallenilla said his phone was flooded with messages about his son.
“Many told me, ‘Now David will be resting in peace. David must be happy in heaven,’” he said. “But don't think it was easy: I spent the whole day crying.”
Vallenilla is watching the events in Venezuela unfold with skepticism but also hope. He fears more violence, but says he has hope the Trump administration can effect the change that Venezuelans like his son tried to obtain through elections, popular protests and international institutions.
“Nothing will bring back my son. But the fact that some justice has begun to be served for those responsible helps me see a light at the end of the tunnel. Besides, I also hope for a free Venezuela.”
Journalist Carleth Morales first came to Madrid a quarter-century ago when Hugo Chávez was reelected as Venezuela's president in 2000 under a new constitution.
The 54-year-old wanted to study and return home, taking a break of sorts in Madrid as she sensed a political and economic environment that was growing more and more challenging.
“I left with the intention of getting more qualified, of studying, and of returning because I understood that the country was going through a process of adaptation between what we had known before and, well, Chávez and his new policies," Morales said. "But I had no idea that we were going to reach the point we did.”
In 2015, Morales founded an organization of Venezuelan journalists in Spain, which today has hundreds of members.
The morning U.S. forces captured Maduro, Morales said she woke up to a barrage of missed calls from friends and family in Venezuela.
“Of course, we hope to recover a democratic country, a free country, a country where human rights are respected,” Morales said. “But it’s difficult to think that as a Venezuelan when we’ve lived through so many things and suffered so much.”
Morales sees it as unlikely that she would return home, having spent more than two decades in Spain, but she said she hopes her daughters can one day view Venezuela as a viable option.
“I once heard a colleague say, ‘I work for Venezuela so that my children will see it as a life opportunity.’ And I adopted that phrase as my own. So perhaps in a few years it won’t be me who enjoys a democratic Venezuela, but my daughters.”
For two weeks, Verónica Noya has waited for her phone to ring with the news that her husband and brother have been freed.
Noya’s husband, Venezuelan army Capt. Antonio Sequea, was imprisoned in 2020 after having taken part in a military incursion to oust Maduro. She said he remains in solitary confinement in the El Rodeo prison in Caracas. For 20 months, Noya has been unable to communicate with him or her brother, who was also arrested for taking part in the same plot.
“That’s when my nightmare began,” Noya said.
Venezuelan authorities have said hundreds of political prisoners have been released since Maduro's capture, while rights groups have said the real number is a fraction of that. Noya has waited in agony to hear anything about her four relatives, including her husband's mother, who remain imprisoned.
Meanwhile, she has struggled with what to tell her children when they ask about their father's whereabouts. They left Venezuela scrambling and decided to come to Spain because family roots in the country meant that Noya already had a Spanish passport.
Still, she hopes to return to her country.
“I’m Venezuelan above all else,” Noya said. “And I dream of seeing a newly democratic country."
Venezuelan journalist Caleth Morales works in her apartment's kitchen in Madrid, Wednesday, Jan. 14, 2026. (AP Photo/Bernat Armangue)
David Vallenilla, father of the late David José Vallenilla Luis, sits in his apartment's kitchen in Madrid, Tuesday, Jan. 13, 2026. (AP Photo/Bernat Armangue)
Veronica Noya holds a picture of her husband Antonio Sequea in Madrid, Thursday, Jan. 15, 2026. (AP Photo/Bernat Armangue)
David Vallenilla holds a picture of deposed President Nicolas Maduro, blindfolded and handcuffed, during an interview with The Associated Press at his home in Madrid, Tuesday, Jan. 13, 2026. (AP Photo/Bernat Armangue)
Pictures of the late David José Vallenilla Luis are placed in the living room of his father, David José Vallenilla, in Madrid, Tuesday, Jan. 13, 2026. (AP Photo/Bernat Armangue)
