The American economy grew at a faster pace than analysts had expected in the third quarter of the year, according to new data from the Commerce Department, which the administration has celebrated as validation of President Donald Trump’s economic agenda.
On Tuesday, in its initial estimate for the July, August and September period, the Bureau of Economic Analysis (BEA) said real gross domestic product (GDP) increased at an annual rate of 4.3 percent, following a 3.8 percent increase in the second quarter and a contraction of 0.6 percent in the first quarter.
This is the highest rate since the 4.7 percent growth seen in the third quarter of 2023, and significantly exceeded consensus expectations of a 3.3 percent gain.
“The TARIFFS are responsible for the GREAT USA Economic Numbers JUST ANNOUNCED…AND THEY WILL ONLY GET BETTER!,” Trump posted to Truth Social on Tuesday morning.
“60 of 61 Bloomberg Economists got it WRONG, but “TRUMP,” and some other Geniuses, got it right,” the president said in a follow-up post on his social-media site, adding, “The Trump Economic Golden Age is FULL steam ahead.”
Why It Matters
The better-than-expected figures arrive at a critical time for Trump, who has been facing increased economic scrutiny over inflation, employment and the issue of affordability.
The robust pace of growth in the third quarter will likely quell any immediate fears over a recession in the U.S. and, as experts have already noted, this could give the Federal Reserve reason to hold off on another rate cut as it grapples with still-elevated inflation.
What To Know
The BEA report follows a host of shutdown-delayed data releases that have given a belated and mixed look into the health of the U.S. economy. The Department of Labor’s latest jobs report found that hiring remained slow in November and the unemployment rate hit its highest level since September 2021. The most recent consumer price index (CPI) report, published on Thursday, showed that inflation had unexpectedly cooled to 2.7 percent, though this remains above the Fed’s long-term 2 percent target.
The data show the economy growing at an annual rate of 2.5 percent for the year to date, comparable to the 2.4 percent growth seen in 2024 at the end of Joe Biden’s presidency.
An initial reading of third-quarter GDP was originally scheduled for release at the end of October, but the BEA in November said it had canceled the advance estimate and postponed the second estimate due to the government shutdown.
The growth mainly came from increases to consumer spending, government spending and exports, the BEA said, which were somewhat offset by decreased investment. Imports also decreased during the three months, albeit at a slower pace than in the second quarter.
Consumer spending accelerated to 3.5 percent from 2.5 percent in the second quarter, while exports grew 8.8 percent after shrinking 1.8 percent. Business investment, however, slowed to 2.8 percent from 7.3 percent.
“NO INFLATION & GREAT NATIONAL SECURITY. Pray for the U.S. Supreme Court!!!” Trump added in Tuesday’s post, referring to the Court’s upcoming ruling on the extent of his tariff powers and the legality of the duties unveiled in his second term.
But some have expressed caution despite the high levels of spending and encouraging topline figures.
“This was the strongest six months of growth since late in 2023, but it certainly didn’t feel that way for most people,” said KPMG Chief Economist Diane Swonk, per The Washington Post. “Consumers are still spending and there’s been extraordinary investment in data centers, but we’re in a very odd situation where the economy is growing without generating jobs.”
What People Are Saying
Michael Pearce, Chief US Economist at Oxford Economics, in comments shared following the release: “The strong rise in GDP in Q3 was flattered by a rise in defense spending and a big contribution from net trade as imports declined, but underlying measures are consistent with a solid expansion. While Q4 numbers will be dinged by the federal government shutdown, we expect the consumer and a rebound in non-AI investment spending will drive a pickup in growth in 2026.”
White House spokesman Kush Desai, via X: “Today’s blockbuster, expectation-smashing GDP report is the latest proof that President Trump’s America First trade and economic agenda continues to turn the page on the Biden economic disaster: American consumers are spending, and American exports are surging. President Trump built the greatest economy in the world in his first term, and he’s in the process of doing it all over again. Americans can count on benefiting from a historic economic boom in 2026.”
The White House Council of Economic Advisers, in response to the report, wrote on X: “Virtually all year-to-date GDP growth is driven by the private sector in President Trump’s economy, unlike in Biden’s economy, where government spending was a major driver.
“Consumers are showing their confidence in the economy with their strong spending, which rose at a 3.5 percent seasonally adjusted annualized rate in Q3,” it added in follow-up posts. “This report shows that President Trump’s trade policies are helping to drive an export boom. Net exports rose at an 8.8 percent seasonally adjusted annualized rate in Q3.”
Samuel Fuller, Director at Financial Markets Online, commented: “The data has one big sting in the tail for the president and those calling for further interest rate cuts. The US Federal Reserve has cut rates three times in a row in recent months, but the combination of stubborn inflation and resilient growth will likely take any further cuts off the table for the start of 2026, and this is weighing on US equities as we head into the holidays.”
What Happens Next
The BEA will release the next estimate for GDP growth in the third quarter on January 22, days before the Federal Reserve Open Market Committee meets to decide whether to pursue a fourth consecutive rate cut.
Update, 12/23/2025, 10:31 a.m. ET: This article was updated with additional information.