The Illusion Behind the U.S. GDP Data for Q2 2025

In the second quarter of 2025, U.S. GDP grew by 2.96% year-over-year. On the surface, this appears to be a strong rebound from the -0.51% recorded in the first quarter, but it is essentially a statistical sleight of hand resulting from accounting rules. To understand the true meaning of this data, we must first clarify the fundamental differences in how the United States and China calculate GDP.

The Fundamental Difference in U.S. and Chinese GDP Calculation Logic

The U.S. uses a quarter-over-quarter (QoQ) calculation method, directly comparing the current period’s data with the previous period’s. China, on the other hand, uses a year-over-year (YoY) calculation method, comparing the current period’s data with the same period in the previous year.

Neither method is inherently right or wrong; both are the most reasonable approaches chosen based on the economic structural characteristics of each country:

  • As a major manufacturing powerhouse, China’s production activities exhibit distinct seasonal cycles. The Spring Festival holiday, in particular, causes significant fluctuations in monthly data. Using year-over-year comparisons effectively smooths out seasonal distortions, providing a more accurate reflection of long-term growth trends.
  • In the U.S., holidays are relatively scattered, so the impact of fluctuations in month-over-month calculations is minimal. Meanwhile, financial markets require high-frequency data to capture short-term changes, making month-over-month data more suitable for trading decisions.

The 3% growth in the second quarter of 2025 was essentially a weak rebound from the low base of negative growth in the first quarter; it is by no means a signal of economic recovery. As long as the month-over-month figure turns slightly positive, it creates the illusion of “high growth,” which is entirely a result of how statistical rules are designed.

A Breakdown of the True Composition of U.S. GDP

The classic formula for GDP is C (Consumption) + I (Investment) + G (Government Spending) + Net Exports. However, when analyzing the U.S. economy today, the net exports component has completely lost its reference value.

The Trump administration’s trade policies are entirely unpredictable, with tariff adjustments decided solely by personal whim and lacking any discernible rules. The most typical example is the Swiss tariff incident in late July 2025:

  • Prior to this, the U.S. and Switzerland had reached a tentative agreement setting tariffs at approximately 10%
  • After a phone call with Swiss officials, Trump unilaterally raised tariffs to 39%
  • The entire decision-making process involved no hearings, assessments, or cabinet discussions; it was entirely driven by personal sentiment
  • Switzerland’s market access for U.S. products had already reached 99%, leaving virtually no room for concessions; this tariff adjustment defied all logic

Given such chaotic trade policies, analyzing U.S. GDP simply requires excluding the net exports component. Of the remaining three components:

  • Consumer spending has remained largely flat, with no significant growth
  • Residential investment is already making a negative contribution
  • The contribution from non-residential investment is shrinking
  • Government spending continues to contract under Trump’s “small government” policy orientation

Simply put, the U.S. economy’s endogenous growth momentum is nearly exhausted, and the so-called GDP growth is entirely an illusion created by statistical rules and a low base.

Core Assessment of the Gold Trend

The pricing logic of gold is essentially a hedge against the stability of the global monetary and credit system. We are currently at a turning point in this system:

  • The scope for falsifying U.S. GDP data is shrinking, and market skepticism regarding the credibility of the U.S. dollar continues to rise
  • The unpredictability of trade policies has disrupted global supply chains, leading to persistent inflationary pressures
  • Geopolitical conflicts continue to escalate, driving up demand for safe-haven assets

Against this backdrop, gold’s long-term upward trend has been firmly established, and any short-term pullback presents a buying opportunity. Over the next two to three years, gold is poised to experience a historic rally.

(This article is based on market analysis from August 9, 2025. All assessments are grounded in the macroeconomic environment at that time and do not constitute investment advice.)