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The US economy grew at an annualised rate of 4.3 per cent in the third quarter, according to official data released on Tuesday that far surpassed economists’ expectations.
The rise in GDP, which was driven by increases in consumer and government spending as well as exports, compared with estimates of a 3.2 per cent rise among economists polled by Bloomberg.
The figure from the Bureau of Economic Analysis, which was delayed by the recent government shutdown, provides the clearest snapshot of the state of the US economy this year after GDP reports for the first two quarters were distorted by big trade swings.
The world’s biggest economy shrank by an annualised 0.5 per cent in the first quarter as businesses rushed to buy foreign goods ahead of the implementation of Donald Trump’s sweeping tariffs, before growing at a 3.8 per cent rate in the second quarter as imports slid.
The market reaction to Tuesday’s data was muted, with many on Wall Street trading desks out of the office. Treasury yields ticked up, though the dollar index and stock futures were little moved.
Imports, which have a negative effect on GDP, slipped again in the third quarter.
Third-quarter growth was boosted by hefty investment in AI infrastructure and healthy consumer spending by wealthier Americans — especially on electric vehicles ahead of the expiration of Biden-era subsidies. Healthcare spending also increased.
A slowdown in consumer spending, alongside issues related to the shutdown, are expected to weigh on growth in the final quarter of 2025. Data for this period has also been delayed by the shutdown and will be released next year.
This is a developing story