Take Two: US economic growth revised up; France endures market volatility

What do you need to know?

The US economy grew at an annual rate of 3.3% in the second quarter (Q2), up from Q1’s 0.5% contraction, and the 3% initially estimated. The expansion mainly reflected lower imports, as well as upward revisions to consumer spending and investment, including in artificial intelligence. In the wake of the revised GDP data, and some upbeat technology company results, the US blue-chip S&P 500 index hit another new high. Meanwhile, the US imposed tariffs of 50% on most Indian imports last week, due to India’s purchasing of discounted Russian oil.

Around the world

France’s financial markets endured a volatility spike last week after Prime Minister François Bayrou put his government forward for a confidence vote on 8 September in the wake of his plans for sweeping budget cuts. The main opposition parties – from both the right and the left – have declared they will vote against Bayrou, meaning his administration could fall, which could escalate the political uncertainty. The situation saw bond yields rise and while France’s CAC 40 index lost some ground, year to date it was up 8% as of Thursday’s market close.*

*Source: FactSet, 28 August 2025 (euro terms)

Figure in focus: One million plus hectares

Wildfires across the European Union (EU) have burned more than one million hectares of land so far this year, the largest area since records began in 2006, according to official EU data. The majority of the fires – at more than two thirds - took place in Spain and Portugal, and the total surpasses 2017’s record of 998,000. The 2025 wildfires have so far emitted 37 million tonnes of carbon dioxide, meaning this year’s total could eventually overtake the record of 41 million tonnes, according to Reuters. Meanwhile a scientific study, from Imperial College London, concluded that the intensifying Mediterranean fire season is linked to climate change.

Words of wisdom:

The Great Stay: A term coined by economists referring to the fewer number of employees voluntarily leaving their jobs and fewer employers hiring or letting go of staff. The term contrasts with the ‘Great Resignation’ witnessed during the COVID-19 pandemic where millions of workers left their roles. Attributed partly to ongoing economic uncertainty due to high inflation, interest rates and the cost of living, workers are reportedly holding off long-term decisions regarding their careers. The impact can be seen worldwide – recent US jobs data showed a slowdown in hiring with 73,000 new jobs added in July, below analysts’ expectations of around 115,000.

What’s coming up?

On Monday, the Eurozone reports its latest unemployment data and follows on Tuesday with a flash inflation estimate for August - July’s annual headline reading was confirmed at 2.0%, unchanged from June. On Wednesday, Australia issues Q2 GDP data while a raft of Purchasing Manager’s Indices are also released including those covering China, Japan, India, the Eurozone and the UK. The US publishes import and export data for July on Thursday, followed by employment figures on Friday, when the Eurozone also reports a third estimate of Q2 GDP growth – the previous estimate put annual expansion at 1.4% for the period.