The U.S. economy expanded at a robust 4.3% annualized rate in the third quarter of 2025, surpassing expectations and accelerating from the previous quarter's 3.8% growth. The data, delayed by a government shutdown, highlights strong consumer spending despite rising concerns over inflation and job security. President Trump attributed the surge to his tariffs and tax policies.
The Commerce Department's Bureau of Economic Analysis reported on Tuesday that gross domestic product grew at a 4.3% annual rate from July to September, outpacing the 3.8% increase in the second quarter and exceeding economists' forecasts of around 3.1% to 3.3%. This marks the strongest quarterly growth since 2023, driven primarily by a 3.5% rise in consumer spending—up from 2.5% in the prior period—along with increases in exports and state and local government spending. Imports declined, which boosted the GDP figure since they are subtracted in the calculation.
The report's release was postponed from late October due to a 43-day government shutdown, rendering the data somewhat outdated. Consumer spending focused on areas like hospital and nursing home services, prescription drugs, vehicles, and information processing equipment amid an AI boom. A rush to purchase electric vehicles before the September 30 expiration of tax credits contributed to the acceleration, though motor vehicle sales dropped in October and November.
President Trump celebrated the figures on Truth Social, stating, "Q3 GDP came in at 4.3%, BLOWING PAST expectations... The SUCCESS is due to Good Government, and TARIFFS." He added that consumer spending is strong, net exports are up, imports and trade deficits are down, and there is "NO INFLATION." Treasury Secretary Scott Bessent had predicted such growth, noting, "The economy has been better than we thought," and pledging to reduce deficit spending to 3% of GDP with supportive Federal Reserve policies.
However, underlying challenges persist. Disposable personal income remained flat as inflation eroded wages, with consumer prices rising 2.7% year-over-year in November. Consumer confidence has declined for five straight months, per the Conference Board, amid worries about inflation, the political environment, and labor market stability. An NPR/PBS News/Marist poll shows only 36% of Americans approve of Trump's economic handling. Economist Michael Zdinak of S&P Global Market Intelligence remarked, "We're skating on past success... but consumers have this sword of Damocles hanging over their head that AI is coming for their jobs or that mass layoffs are just right around the corner."
White House Press Secretary Karoline Leavitt countered skepticism, writing on X, "The doubters, naysayers, panicans, and liberal media have been proven wrong—again. Trust in Trump. The President’s pro-growth policies are working, and the best is yet to come!" The nonpartisan Congressional Budget Office estimates the shutdown could reduce fourth-quarter GDP by 1 to 2 percentage points, with $7 billion to $14 billion in losses not recoverable. Earlier in 2025, the economy had contracted 0.6% in the first quarter amid tariff preparations, contrasting the administration's narrative of policy-driven revival.
