The US economy gained momentum in the three months to September, surpassing expectations as consumer demand and exports surged. Annualized GDP growth reached 4.3 percent, up from 3.8 percent in the previous quarter, marking the fastest expansion in two years.
The report, delayed by the recent government shutdown, highlights an economy navigating policy shifts, inflation pressures, and federal spending cuts. Despite volatility in trade and investment, underlying economic activity has remained robust, outperforming many forecasts.
“This is an economy that has defied doom and gloom expectations basically since the beginning of 2022,” said Aditya Bhave, senior economist at Bank of America. He described the US economy as “very very resilient” and sees no immediate reason for that trajectory to falter.
Consumer spending rose at an annual rate of 3.5 percent, up from 2.5 percent in the prior quarter, driven largely by higher health care outlays. Exports rebounded sharply, climbing 7.4 percent, while imports continued to decline, reflecting tariffs imposed earlier this year. Government expenditure also strengthened, supported by defence-related spending.
These gains offset a slowdown in business investment, including intellectual property, and challenges in the housing market, which continues to face high interest rates and supply constraints.
Analysts remain cautiously optimistic for 2026. Michael Pearce, chief US economist at Oxford Economics, said, “Underlying measures are consistent with a solid expansion,” citing expected benefits from recent tax cuts and central bank interest rate reductions.
However, some economists warn that rising prices could weigh on future growth. The personal consumption expenditures price index increased 2.8 percent in the third quarter, compared with 2.1 percent previously. Oliver Allen of Pantheon Macroeconomics noted that stagnant real incomes, a weakening labor market, and depleted pandemic-era savings are prompting households to curb spending.
President Donald Trump celebrated the quarterly figures on social media, attributing gains to his trade policies, even as consumer confidence surveys show lingering concerns over economic management.
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