The US economy picked up pace in the three months to September as consumer spending rose and exports rebounded. Economic output expanded at an annual rate of 4.3%, exceeding forecasts. Growth increased from 3.8% in the previous quarter and reached its fastest level in two years.
The data arrived after delays caused by a federal government shutdown. The report described an economy shaped by shifting trade policies, immigration changes, persistent inflation, and reduced public spending. These pressures created sharp swings in trade activity. Despite that volatility, overall momentum remained strong and surpassed many predictions.
Economic resilience surprises experts
Aditya Bhave, senior economist at Bank of America, said the economy repeatedly defied negative forecasts since early 2022. He described conditions as highly resilient during an interview on a major international business programme. Bhave said he expected that strength to continue in the months ahead.
Many economists had predicted weaker growth. Forecasts pointed to annual expansion of about 3.2% in the third quarter. The actual figures exceeded those expectations by a significant margin.
Consumer spending drives growth
Household spending provided the largest contribution to growth. Consumer spending rose at a 3.5% annual rate, up from 2.5% in the previous quarter. Spending increased despite signs of cooling in the labour market. Households directed more funds toward healthcare services.
Imports continued to decline and reduced their drag on growth. The fall reflected new taxes on goods entering the country announced earlier this year. Exports rebounded sharply after previous weakness, surging 7.4%. Government spending also recovered, led mainly by higher defence outlays.
Business investment and housing lag
Strong gains in consumption and trade offset weaker business investment. Companies reduced spending, including investment in intellectual property. The housing market remained under pressure from high interest rates. Elevated borrowing costs worsened affordability issues and tightened supply constraints.
Michael Pearce, chief US economist at Oxford Economics, said the economy approached 2026 from a position of strength. He said tax cuts and recent interest rate reductions should support future activity. Pearce added that underlying indicators continued to point to steady expansion.
Inflation raises caution
Donald Trump praised the figures on social media and said tariffs fueled the strong performance. He faced criticism as consumer confidence weakened and opinion polls showed dissatisfaction with his economic leadership. Analysts questioned whether such rapid growth could last.
Price pressures increased during the quarter. The preferred inflation measure rose 2.8%, up from 2.1% in the previous quarter. Analysts warned that higher prices hit lower and middle income households hardest. Higher income households continued spending freely.
Oliver Allen, senior US economist at Pantheon Macroeconomics, said recent data showed consumers becoming more cautious. Surveys and credit card data suggested slower spending. Allen said weak labour conditions, stagnant real incomes, and depleted pandemic savings now constrained households.
