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Second-quarter GDP growth upgraded to 3.3% paceInvestment in AI, consumer spending drive upward revisionWeekly jobless claims fall 5,000 to 229,000The US economy grew faster than initially thought in the second quarter, in part driven by business investment in intellectual property such as artificial intelligence, but tariffs on imports continued to cloud the outlook.The upgrade to gross domestic product reported by the Commerce Department on Thursday also reflected upward revisions to consumer spending as well as business investment in equipment. That resulted in a measure of underlying domestic demand also being revised higher. With the Federal Reserve focused on a softening labour market, economists expected the US central bank to resume cutting interest rates next month."I doubt this moves the needle for the Fed, but at the margin, these revisions work against the case for urgency to cut rates," said Stephen Stanley, chief US economist at Santander US Capital Markets.GDP increased at a 3.3% annualised rate last quarter, the Commerce Department's Bureau of Economic Analysis (BEA) said in its second estimate. The economy was initially reported to have grown at a 3.0% pace in the second quarter. Economists polled by Reuters had expected GDP growth would be raised to a 3.1% rate.The economy contracted at a 0.5% pace in the January-March quarter, which was the first GDP decline in three years.The manner in which President Donald Trump's administration has implemented the tariffs, including escalations and 90-day pauses, has muddied the waters, making it challenging to parse economic data. A front-loading of imports as businesses rushed to beat the duties pulled down GDP in the first quarter before snapping back as the flow of foreign merchandise ebbed.Neither first- nor second-quarter GDP readings are a true reflection of the economy's health because of the wild swings in imports. To get a better read of the economy, economists are focusing on the final sales to private domestic purchasers measure, which excludes trade, inventories and government spending.This measure, also viewed by policymakers as a barometer of underlying economic growth, increased at an upwardly revised 1.9% pace last quarter, matching the first quarter's pace.Domestic demand was initially estimated to have grown at a 1.2% rate. The revision reflected upgrades to consumer spending, the economy's main engine, which is now estimated to have increased at a 1.6% rate. That was up from the previously reported 1.4% pace.Business spending on intellectual property products grew at a 12.8% rate, double the initially estimated 6.4% pace."Investment related to AI is helping mask some of the weakness elsewhere in the economy, but the good news is that there is little sign that this support is set to fade anytime soon," said Ryan Sweet, chief economist at Oxford Economics.Growth in business investment in equipment was upgraded to a 7.4% pace from the 4.8% rate estimated last month.Still, economists expect a lacklustre second half, which would limit economic growth to about 1.5% for the full year because of tariffs. That reading would be down from 2.8% in 2024.The BEA also reported that profits from current production with inventory valuation and capital consumption adjustments rebounded $65.5bn last quarter. Profits decreased $90.6bn in the January-March period.But further increases are likely to be hampered by Trump's protectionist trade policy, which has raised the nation's average import duty to its highest level in a century, inflicting pain on companies ranging from retailers to manufacturers.Caterpillar this month warned tariffs could cost the economic bellwether up to $1.5bn this year.In July, General Motors' second-quarter earnings took a $1.1bn hit from the duties and the automaker anticipated more pain in the third quarter. Clothing retailer Abercrombie & Fitch on Wednesday warned that higher tariffs on countries such as Vietnam, Indonesia, Cambodia and India would increase costs by $90mn this year.Fed Chair Jerome Powell last week signalled a possible interest rate cut at the central bank's September 16-17 policy meeting, in a nod to rising labour market risks, but also added that inflation remained a threat.The Fed has kept its benchmark overnight interest rate in the 4.25%-4.50% range since December.News on the labour market remained mixed, with a report from the Labor Department showing initial claims for state unemployment benefits decreased 5,000 to a seasonally adjusted 229,000 for the week ended August 23. The labour market is stuck in a no-hire, no-fire mode due to tariffs.The number of people receiving benefits after an initial week of aid, a proxy for hiring, fell 7,000 to a seasonally adjusted 1.954mn during the week ending August 16, the claims report showed. The so-called continuing claims data covered the week during which the government surveyed households for August's unemployment rate.Continuing claims rose slightly between the July and August survey weeks, leaving some economists expecting the unemployment rate will rise to 4.3% in August from 4.2% in July.

Africa has become a new hotspot for Chinese exports as Donald Trump’s tariffs redraw trade for the world’s biggest manufacturing nation.With a 25% on-year jump to $122bn, growth in sales to the continent of 1.5bn people has far outpaced other major markets this year while orders from the US slumped. China’s exports to Africa so far in 2025 are more than in the whole of 2020 and on track to exceed $200bn for the first time.Although the trading relationship shows no sign of becoming less lopsided, with China running a far wider surplus with Africa than last year, Beijing is cracking open its domestic market while seizing on the chance to meet the continent’s infrastructure needs.“Chinese exporters have done a genuinely impressive job of diversifying into emerging markets in recent years, including in Africa,” said Christopher Beddor, deputy China research director at Gavekal Dragonomics. “The weaker yuan this year has probably also made Chinese exports more competitive in African countries.” The trade war has supercharged a boom that was years in the making, spearheaded by President Xi Jinping’s Belt and Road Initiative unveiled in 2013. And as Chinese companies snapped up contracts to build everything from railways to industrial parks across the continent, the demand for the machinery and materials to complete these projects followed this year.Nigeria, South Africa and Egypt are the biggest African buyers of Chinese products. Construction machinery was among China’s fastest growing exports to Africa in the first seven months, surging 63% year on year.Shipments of passenger cars more than doubled from a year earlier and some steel products expanded in high double digits. At the same time, Africa’s share of China’s total exports remains modest at about 6%, roughly half the level for the US.Some goods destined for the US are possibly being diverted through Africa, according to Gavekal’s Beddor, a tactic known as transshipment.Rising protectionism in Washington has given extra incentive for Africa to buy from Beijing. A number of goods from more than 30 nations on the continent that had duty-free access to American markets granted under the African Growth and Opportunity Act are now being subjected to a range of tariffs by the Trump administration.In the first half of 2025 alone, Africa inked $30.5bn in construction contracts with China, according to a July report from Griffith University in Australia and the Green Finance & Development Center, founded at Shanghai-based Fudan University. That’s five times the amount during the same period last year and the most among all regions included in Xi’s infrastructure initiative.And in a counterpoint to Trump, Xi said in June that China is removing levies on imports from all African nations with which it has diplomatic ties.During the same month, the government in Beijing allowed imports of agricultural products from Ethiopia, Congo, Gambia, and Malawi, bringing to 19 the number of African countries with access to China’s market.In Africa, China could bring know-how and its vast industrial machine to a continent struggling with costly logistics and held back by its patchy infrastructure, with less than half of the population having reliable electricity access.African nations have been ordering more solar panels from China, with imports of the clean-energy technology surging 60% in the 12 months through June, according to climate think tank Ember. Over the last two years, purchases of Chinese solar panels to the continent beyond South Africa have tripled, Ember said in a report this week.“Energy resources remain unevenly distributed in Africa, with some nations heavily reliant on imports” like oil, said Zhou Mi, a senior researcher at the Chinese Academy of International Trade and Economic Cooperation, a think tank under the Ministry of Commerce.“Alternatives offered by China, such as solar and wind power as well as electric cars, can help African countries overcome energy bottlenecks, prompting them to increase imports from the country in pursuit of energy independence and economic development,” he said.Affordability is another factor working in China’s favour. Despite higher demand, prices for 14 out of the 18 major Chinese goods shipped to Africa actually fell on a yearly basis in the January-July period, with transformers and converters posting the deepest decline of 39%.China is also bringing financial muscle to the continent with the world’s fastest-growing population, often in the form of backing from state-owned banks. Only in recent months, China Development Bank released a €245mn ($286mn) first tranche of funding for a railway project in Nigeria and extended a loan for infrastructure construction in Egypt.Although most of the commodities imported from Africa to China are priced in dollars, the expanding trade footprint will probably help the yuan make inroads in corporate and government balance sheets.Nigeria, South Africa and Egypt are among the four countries on the continent that already have bilateral currency swaps with the central bank in Beijing — a list that includes Mauritius. Kenya has announced it’s in talks to convert some dollar-denominated loans to yuan to help ease the strain of debt.“China obviously benefits from greater use of its currency in the financial system – so that’s the incentive to offer preferential terms if they swap currency debt,” said David Omojomolo, Africa economist at Capital Economics. “I do expect heavily exposed countries to China in terms of debt like Angola will perhaps follow Kenya’s lead on this yuan swap if it’s pulled off.”Chinese goods barred or resisted elsewhere are meanwhile receiving little pushback in Africa. Exports of steel and iron components — used to build bridges, towers and scaffolding — climbed 43%.Sales of batteries spiked 41%, and transformers and converters, including inverters that adapt electricity from solar panels and wind systems to power home appliances and industrial equipment, soared nearly 25%.For now, China has yet to encounter the kind of backlash seen from countries around the world that fear the flood of cheaper goods. But it’s a risk in a region already worried about falling further into debt to China, especially if the exports begin to crowd out local producers.But Beijing will tread carefully since the continent is critical as a source of key commodities and a growth market for its companies. What’s more, it’s become a central arena for China’s aspirations on the world stage.“Africa is where China takes its firms and brands global — they get experience, create markets, and win brand recognition,” said Lauren Johnston, a China-Africa expert of New South Economics, a consultancy in Melbourne. “It is important for China’s global development leadership push.”

India saved $17bn by ramping up Russian oil imports, say analystsTrump’s new tariffs of up to 50% could slash Indian exports to US by $37bnLabour-heavy sectors like textiles, gems, and jewellery face major job lossesIndia open to buying more US energy but won’t abandon Russia entirelyIndia saved billions of dollars by stepping up imports of discounted Russian oil in the wake of the war in Ukraine, but punitive tariffs imposed by the US that came into effect Wednesday will quickly undo the gains, with no easy solutions in sight.Analysts estimate India has saved at least $17bn by increasing oil imports from Russia since early 2022. US President Donald Trump's decision to impose additional tariffs of up to 50% on Indian imports could slash exports by more than 40%, or nearly $37bn, this April-March fiscal year alone, according to New Delhi think-tank Global Trade Research Initiative (GTRI).The fallout from the tariffs will be lingering, and could be politically debilitating for Prime Minister Narendra Modi, with thousands of jobs at risk in labour-intensive sectors such as textiles, gems, and jewellery. India's response in the coming weeks could reshape its decades-old partnership with Russia and recalibrate its increasingly complex ties with the US, a relationship Washington sees as vital to countering China’s growing influence in the Indo-Pacific, analysts said."India needs Russia for defence equipment for several more years, cheap oil when available, geopolitical support in the continental space and political backing on sensitive matters," said Happymon Jacob, the founder of Delhi's Council for Strategic and Defence Research. "That makes Russia an invaluable partner for India."But he added: "Despite the difficulties between Delhi and Washington under Trump, the United States continues to be India’s most important strategic partner. India simply doesn’t have the luxury of choosing one over the other, at least not yet."Two Indian government sources said New Delhi wants to repair ties with Washington and is open to increasing purchases of US energy but is reluctant to fully halt Russian oil imports. Discussions with the US are ongoing, India’s foreign secretary told reporters on Tuesday, with officials from both countries holding virtual talks on trade, energy security including nuclear cooperation, and critical minerals exploration.Russian crude now accounts for nearly 40% of India’s total oil purchases from nearly nothing before the war, and analysts say any immediate stoppage would not only signal capitulation under pressure but also be economically unfeasible. Indian purchases are led by billionaire Mukesh Ambani's Reliance Industries , which operates the world's largest refining complex in Modi's home state of Gujarat.Global crude prices could more than triple to around $200 a barrel if India, the world’s third-largest oil consumer and importer, stops buying oil from Russia, according to internal Indian government estimates reviewed by Reuters. It would also lose the up to 7% discount Russian oil offers compared to global benchmarks. In an unusually sharp statement this month, India accused the US of double standards in singling it out for Russian oil imports while itself continuing to buy Russian uranium hexafluoride, palladium and fertiliser. New Delhi says other countries that have stepped up purchases of Russian oil, like China, have not been penalised. US Treasury Secretary Scott Bessent has accused India of profiteering from its sharply increased purchases of Russian oil and called it unacceptable. He told CNBC in an interview last week that unlike India's surge in Russian oil imports after the start of the war in Ukraine, China's purchases had increased to 16% from 13%. India's foreign ministry has said its crude imports from Russia are "meant to ensure predictable and affordable energy costs to the Indian consumer. They are a necessity compelled by the global market situation".New Delhi warns that halting Russian oil imports, which is currently around 2mn barrels per day, would disrupt its entire supply chain and send domestic fuel prices soaring. It has said the previous US administration under Joe Biden had backed its purchases of Russian oil to keep global prices stable. Russia has said it expects India to keep buying oil from it.Modi has not directly commented on the tariffs but has repeatedly pledged support for India’s farmers — seen as a veiled response to Trump’s demands to open up India’s vast agricultural sector.Farmers are a key voting bloc, and Modi faces a tough election in the rural state of Bihar later this year. He has also pledged major cuts in a goods and services tax by October to lift domestic demand.In a flurry of diplomatic activity aimed at multipolarity, senior Indian officials have travelled to Russia in recent days, while Modi is set to visit China this month for the first time in over seven years. India-China relations began thawing about a year ago, following a deadly border clash in 2020. Modi is expected to meet both Chinese President Xi Jinping and Russian President Vladimir Putin at a summit meeting starting on Sunday of the Shanghai Cooperation Organisation, a regional security bloc. But the sources said India is still very cautious in its relations with China and not yet considering a trilateral summit between the three leaders, as hoped by Russia.Other countries could take their cue from how India reacts to the US tariffs, experts said."The key takeaway for other countries is that if India — an emerging major economic and military power — is under immense pressure from the US, they might have even less capacity to withstand American pressure," said Jacob, the analyst."Additionally, some might interpret the current dynamics as indicating that China could potentially serve as a counterbalance, especially given Trump’s unpredictable and aggressive geopolitical moves." International relations experts say Trump's recent moves have plunged the US-India relationship back to possibly its worst phase since the US imposed sanctions on India for nuclear weapons tests in 1998. Besides trade, the row could affect other areas like work visas for Indian tech professionals and offshoring of services.And even if India is able to eventually get some of the tariffs reversed, several consequences will linger, especially in trade."Competitors like China, Vietnam, Mexico, Turkiye, and even Pakistan, Nepal, Guatemala, and Kenya stand to gain, potentially locking India out of key markets even after tariffs are rolled back," said GTRI founder Ajay Srivastava, a former Indian trade official.

Ukrainian drone strikes on Russia’s oil export pipelines and a doubling of US tariffs on goods imported from India appear to be hitting Moscow’s crude flows.Weekly crude shipments from Russian ports fell by 320,000 barrels a day in the week to August 24, tanker-tracking data compiled by Bloomberg show.Flows dropped to a four-week low of 2.72mn barrels a day, pushed down by reduced loadings at the Baltic port of Ust-Luga. The drop left four-week average crude shipments little changed, with seaborne cargoes averaging 3.06mn barrels a day.Ukraine has intensified attacks targeting Russia’s oil infrastructure, hitting a major pumping station on the nation’s export pipeline network and several refineries.The Unecha pump station, on the Druzhba pipeline system close to Russia’s border with Belarus, was targeted by Ukrainian drones twice in the past two weeks.The attacks have halted piped crude deliveries to Hungary and Slovakia and appear to have hampered shipments from the port of Ust-Luga on Russia’s Baltic coast. The Baltic Pipeline System 2, which carries Russian and Kazakh crude to the port, begins at Unecha.Storage tanks at the port mean that any halt in deliveries may not result in an immediate drop in shipments, but only two tankers loaded Russian crude at Ust-Luga last week, down from four during the previous seven days and six in the week to August 10, the tracking data and shipping reports show.Recent strikes on the Volgograd and Novoshakhtinsk refineries helped to push Russia’s crude processing down by about 700,000 barrels a day in the third week of August from the average during the last week of July. That ought to free up more crude for export, if processing is halted for long periods.Separately, President Donald Trump’s doubling of US import tariffs on goods from India to 50%, imposed because of New Delhi’s purchases of Russian oil, appears to hitting the flow of Moscow’s crude to the south Asian nation, though it’s unclear how long the trend will persist.Shipments heading to India have fallen by more than 500,000 barrels a day over the past two months and even if all the tankers with no confirmed destination end up discharging at Indian ports, flows would still be down by 300,000 barrels a day, or 17%, since late June.The tariff increase could yet be reversed or paused, but refiners are planning to trim purchases of Russian crude in the coming weeks, a modest concession to Washington’s pressure, but also a signal that New Delhi doesn’t plan to cut ties with Moscow. Nevertheless, Russia sees the discounts it offers Indian refiners as big enough to keep them buying its oil.The US president has repeatedly said he would increase sanctions against Moscow if it failed to agree a ceasefire in Ukraine, most recently on Friday, but the threats have so far come to nothing.Trump’s recent meeting with President Vladimir Putin in Alaska saw the Russian leader conceding little, but getting another stay of execution on threatened US secondary tariffs on China. Chinese refiners have stepped up purchases of discounted cargoes relinquished by India.A total of 25 tankers loaded 19.07mn barrels of Russian crude in the week to August 24, vessel-tracking data and port-agent reports show. The volume was down from 21.3mn barrels on 28 ships the previous week.Crude flows in the period to August 24 stood at about 3.06mn barrels a day on a four-week average basis, up by 20,000 barrels a day from the period to August 17.The four-week average smooths out big swings in weekly numbers, giving a clearer picture of underlying trends in crude flows. Using more volatile weekly figures, shipments fell by about 320,000 barrels to a four-week low of 2.72mn barrels a day. The drop in weekly flows was driven by fewer cargoes being loaded at Ust-Luga.The gross value of Moscow’s exports fell by about $110mn, or 9%, to $1.11bn in the week to August 24 from $1.22bn the previous week. The drop in flows was compounded by slightly lower average prices for Russia’s crudes.