Inflation pressures built up during the July to September period.
Robust consumer spending and a rebound in exports helped the U.S. economy grow faster than economists expected, according to delayed Bureau of Economic Analysis data released on Dec. 23.
Real GDP expanded at a rate of 4.3 percent in the third quarter, up from 3.8 percent in the second quarter.
Ahead of the official government release, the Atlanta Fed’s closely watched GDPNow model had projected 3.5 percent growth for the July–September period. The market consensus was 3.3 percent.
President Donald Trump touted the solid data, attributing growth to tariffs.
“The tariffs are responsible for the great USA economic numbers just announced … and they will only get better! Also, no inflation & great national security. Pray for the U.S. Supreme Court!” he said in a post on Truth Social shortly after the GDP report was released.
The solid July–September performance was reflected by sizable gains in consumer spending (3.5 percent) and exports (8.8 percent), both marking notable accelerations from the second quarter.
Government consumption also rebounded in the last quarter, rising 2.2 percent following two consecutive quarters of contraction.
This partly offset the tepid 0.3 percent drop in gross private domestic investment. Imports, which subtract from gross domestic product calculations, also fell by 4.7 percent.
Trade has contributed to the volatility observed in the GDP data. In the first three months of 2025, the economy contracted as companies rushed to front-run the administration’s tariffs and bolster their purchases of foreign goods. Since then, trade conditions have stabilized as businesses adapt to the evolving tariff landscape.
On the inflation front, price pressures were elevated, the government said.
Personal consumption expenditure (PCE) inflation climbed to 2.8 percent from 2.1 percent. Core PCE inflation, which removes food and energy, ticked up to 2.9 percent from 2.6 percent.
Both readings matched economists’ expectations.
The latest GDP report signals that the U.S. economy has momentum, despite concerns about a cooling labor market.
By Andrew Moran
