The U.S. economy expanded at a surprising 3.8% from April through June, the government reported in a dramatic upgrade of its previous estimate of second-quarter growth.
U.S. gross domestic product — the nation’s output of goods and services — rebounded in the spring from a 0.6% first-quarter drop caused by fallout from President Donald Trump’s trade wars, the Commerce Department said Thursday. The department had previously estimated second-quarter growth at 3.3%.
The first-quarter GDP 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 hurried to bring in foreign goods before Trump could impose sweeping taxes on them. That trend reversed as expected in the second quarter: Imports fell at a 29.3% pace, boosting April-June growth by more than 5 percentage points.
Consumer spending rose at a 2.5% pace, up from 0.6% in the first quarter and well above the 1.6% the government previously estimated.
Since returning to the White House, Trump has overturned decades of U.S. policy in support of freer trade. He’s slapped double-digit taxes — tariffs — on imports from almost every country on earth and targeted specific products for tariffs, too, including steel, aluminum, and autos.
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 on July 4.
But mainstream economists — whose views Trump and his advisers reject — 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 on prices so far has been modest.
The unpredictable way that Trump has imposed the tariffs — announcing and suspending them, then coming up with new ones — has left businesses bewildered, contributing to a sharp deceleration in hiring.
From 2021 through 2023, the United States added an impressive 400,000 jobs a month as the economy bounced back from COVID-19 lockdowns. Since then, hiring has stalled, partly because of trade policy uncertainty and partly because of the lingering effects of 11 interest rate hikes by the Federal Reserve’s inflation fighters in 2022 and 2023.
Labor Department revisions earlier this month showed that the economy created 911,000 fewer jobs than originally reported in the year that ended in March. That meant that employers added an average of fewer than 71,000 new jobs a month over that period, not the 147,000 first reported. Since March, job creation has slowed even more — to an average of 53,000 a month.
On Oct. 3, the Labor Department is expected to report that employers added just 43,000 jobs in September, though unemployment likely stayed at a low 4.3%, according to forecasters surveyed by the data firm FactSet.
Seeking to bolster the job market, the Fed last week cut its benchmark interest rate for the first time since December.
Thursday’s GDP report was the Commerce Department’s third and final look at second-quarter economic growth. It will release its initial estimate of July-September growth on Oct. 30.
Forecasters surveyed by the data firm FactSet currently expect the GDP growth to slow to an annual pace of just 1.5% in the third quarter.
Starbucks announced today that it’ll be cutting around 900 corporate roles and closing underperforming stores as part of a major turnaround. Cuts can be a fast way to improve margins. But are these steps being taken too late? Financial problems are a symptom, not the disease.
For retail leaders, this is a reminder: waiting until the bottom line is bleeding red gives you fewer options. The ones you do have tend to be blunt instruments (cuts, closures, slashing investment) rather than the smart levers that build resilience.
Here’s how to think differently — and act now — if you want to stay ahead:
➡️ Audit your profit centers regularly. Not all departments or SKUs contribute equally. Find your losses first, then decide where to invest, not just what to trim.
➡️ Improve your customer experience as a defense. Even in downswings, customers gravitate toward brands they trust, enjoy, and feel valued by. Loyalty built through experience beats discounting.
➡️ Tighten your operations, not just overhead. Get smarter about inventory turns, staffing schedules, shrink/loss control, and vendor terms. Efficiency gains can offset substantial cost pressures.
➡️ Use scenario planning rather than hoping for “normal”. Map out stress-tested plans for sales down 10–20%, margin compression, and disruptions. That way, you respond proactively—not reactively.
Starbucks’ moves may be necessary for its scale and challenges. But for most retailers, success doesn’t come from pruning until you’re bare — it comes from planting wisely, growing thoughtfully, and reacting early.
Robert Bosch GmbH will cut about 13,000 additional jobs at its auto-parts business as rising competition and a sluggish European car market push the manufacturer into deeper restructuring.
The reductions will be made by 2030 and mainly impact locations in Germany, Bosch said Thursday. The parts maker has eliminated thousands of positions in recent years, but is still seeing an annual shortfall of about €2.5 billion ($2.93 billion) at the mobility division.
Bosch’s move highlights the mounting strain on Germany’s industrial base as automakers and suppliers grapple with tariff costs, muted demand, and intensifying competition from Chinese manufacturers. Demographic pressures in Europe’s biggest economy are pushing up labor expenses, while energy prices remain elevated following Russia’s invasion of Ukraine.
Several parts makers face idle capacity and are under pressure from carmakers to lower prices even as their own input costs climb. Volkswagen AG and Porsche AG are reducing staff and output to offset weak sales in China and the cost of US tariffs. At the same time, Chinese competitors are winning market share with cheaper batteries, motors, and electronic components, eroding margins for traditional manufacturers.
“Geopolitical developments and trade barriers such as tariffs are creating significant uncertainties that all companies must contend with,” said Markus Heyn, the Bosch board member overseeing the mobility business. “We expect competition to intensify further, so our goal is to seize growth opportunities wherever possible and position our Mobility sites worldwide for the future.”
Privately-held Bosch is one of the biggest names in autos. Manufacturing everything from spark plugs to automated driving software, the company has invested heavily in new technologies, including hydrogen and electric vehicles. It employed 417,900 people at the end of last year, so the latest cuts would represent just over 3% of the workforce.
The cuts are a setback for German Chancellor Friedrich Merz, whose party has slipped behind the far-right Alternative for Germany in polls. Merz has tried to bolster confidence with spending packages and his “Made for Germany” investment initiative — which Bosch backed — but manufacturers in the country are still shedding thousands of positions in industries such as steel, chemicals, and cars.
At Bosch, the deepest cuts will hit the company’s historic base in the Stuttgart region. In Feuerbach, where Bosch makes diesel components and has invested in hydrogen technology, about 3,500 jobs will go by 2030 as falling demand leaves plants underused. The Schwieberdingen site will shed some 1,750 positions, reflecting weak orders and the slow rollout of new technologies.
In Waiblingen, Bosch plans to close a 560-person plant that produces connectors for the auto industry by 2028 after years of shrinking volumes. In Bühl, a hub for small electric drives, the company expects to cut about 1,550 jobs, while roughly 1,250 positions will disappear in Homburg, where diesel truck parts still dominate output.
The supplier said it has informed workers and their representatives and will seek socially responsible solutions where possible. Still, management stressed that swift action is needed to restore competitiveness.
“Germany remains central for Bosch,” labor director Stefan Grosch said. “But we have to become more efficient to hold our ground in global competition.”