The US economy grew faster than previously thought this spring, fuelled by robust consumer spending and falling imports, according to new government data.

Gross domestic product (GDP), which measures goods and services production, rose at an annualised rate of 3.8% in the period from April through June – up from the previous estimate of 3.3%.

The second quarter growth – the fastest pace in nearly two years – followed a contraction earlier this year.

Economists said the US economy was doing reasonably well but some uncertainties remain.

Consumer spending rose by 2.5% in the year to the end of June, up from a previous estimate of 1.6%.

In the first three months of 2025, the US economy shrank at a rate of 0.6% as companies rushed in imports to get ahead of US President Donald Trump’s tariffs, which chipped away at GDP.

American consumers, the engine of the world’s largest economy, have remained resilient in the face of tariffs and economic uncertainty.

Retail sales rose 0.6% in August from the prior month, beating expectations, according to data from the Commerce Department released last week.

The continued strength in spending, which has defied worries about a slowdown, is in contrast to recent data showing a weakening labour market.

Employers added just 22,000 jobs in August, fewer than expected, while the unemployment rate ticked up from 4.2% to 4.3%, according to the Labor Department.

But initial claims for unemployment insurance fell last week to their lowest level since July, the Labor Market said on Thursday, in a sign that the jobs market might not be in as dire shape as other data have suggested.

“The latest economic data are considerably more upbeat than the droopy August jobs report,” said Bill Adams, chief economist for Comerica Bank.

“The latest GDP and jobless claims data should ease the bout of anxiety kicked off by the weak August jobs report.”

Economic momentum remained steady in the first half of the year despite mounting policy headwinds, said Lydia Boussour, senior economist at EY-Parthenon.

But she cautioned that “with the impact of tariffs and policy uncertainty becoming increasingly visible, slower US growth and higher inflation are still on the horizon.”

The US economy grew faster than previously thought this spring, fuelled by robust consumer spending and falling imports, according to new government data.

Gross domestic product (GDP), which measures goods and services production, rose at an annualised rate of 3.8% in the period from April through June – up from the previous estimate of 3.3%.

The second quarter growth – the fastest pace in nearly two years – followed a contraction earlier this year.

Economists said the US economy was doing reasonably well but some uncertainties remain.

Consumer spending rose by 2.5% in the year to the end of June, up from a previous estimate of 1.6%.

In the first three months of 2025, the US economy shrank at a rate of 0.6% as companies rushed in imports to get ahead of US President Donald Trump’s tariffs, which chipped away at GDP.

American consumers, the engine of the world’s largest economy, have remained resilient in the face of tariffs and economic uncertainty.

Retail sales rose 0.6% in August from the prior month, beating expectations, according to data from the Commerce Department released last week.

The continued strength in spending, which has defied worries about a slowdown, is in contrast to recent data showing a weakening labour market.

Employers added just 22,000 jobs in August, fewer than expected, while the unemployment rate ticked up from 4.2% to 4.3%, according to the Labor Department.

But initial claims for unemployment insurance fell last week to their lowest level since July, the Labor Market said on Thursday, in a sign that the jobs market might not be in as dire shape as other data have suggested.

“The latest economic data are considerably more upbeat than the droopy August jobs report,” said Bill Adams, chief economist for Comerica Bank.

“The latest GDP and jobless claims data should ease the bout of anxiety kicked off by the weak August jobs report.”

Economic momentum remained steady in the first half of the year despite mounting policy headwinds, said Lydia Boussour, senior economist at EY-Parthenon.

But she cautioned that “with the impact of tariffs and policy uncertainty becoming increasingly visible, slower US growth and higher inflation are still on the horizon.”

Starbucks has said it will cut about 900 US jobs and close its worst performing stores there, as well as shutting some UK stores as part of a cost-saving move.

Most of the stores earmarked for closure are in North America and its chief executive said the revamp would reduce wait times and help revive sales.

It comes after the coffee chain announced in February it was axing 1,100 jobs and simplifying its US menu to help flagging sales in its home market.

“This is a more significant action that we understand will impact partners and customers,” chief executive Brian Niccol said, although the firm said it was still “on track” to open 80 new stores in the UK.

“While the EMEA [Europe, Middle East and Africa] business is on track to meet its commitment to open 80 new stores in the UK and 150 across EMEA this financial year, some stores in the UK, Switzerland and Austria will close as a result of this portfolio review”, Starbucks said.

Mr Niccol said in a letter to employees that the stores marked for closure were “unable to create the physical environment our customers and partners expect, or where we don’t see a path to financial performance”.

Starbucks said the US jobs set to be cut would be support staff roles.

In July, the coffee chain reported its sixth consecutive quarterly drop in sales at stores open at least a year in the US – its biggest and most important market. The company’s shares have fallen more than 8% so far this year.

Mr Niccol joined Starbucks as its chief executive last year, on the heels of a six-year stint at at the helm of Chipotle Mexican Grill. During his tenure there, the fast-casual burrito chain nearly doubled its sales.

The latest store closures and layoffs at Starbucks are part of Mr Niccol’s wide-ranging turnaround strategy in his first year at the company, as the chain tries to lure back dissatisfied customers. His efforts have included remodelling stores to revamp seating and bringing back self-service condiment bars.

Analysts at TD Cowen said in a research note on Thursday that despite Starbucks taking “aggressive actions” to boost the business, its US sales faced mounting competition from drive-through coffee shops.

They also pointed to a deteriorating perception of the chain compared with its rivals.

The company is also facing a unionisation campaign among baristas at its US stores.

Workers United – which is part of the Service Employees International Union and said it represents workers at more than 600 of Starbucks’ company-owned US stores – is fighting for a contract agreement with the company.

The union has voiced concerns about under-staffing at stores and overwhelmed baristas, among other issues.

In response to the company’s restructuring announcement on Thursday, Workers United said it was a sign that “things are only going backwards at Starbucks under Brian Niccol’s leadership”.

“Yet again, we’re experiencing new policies and major decisions being made with zero barista input,” the union said in a statement, adding that it was sending a formal request for information to Starbucks about the planned closures.