The U.S. economy grew at a rapid rate of 4.3% in the third quarter of this year, according to an estimate released Tuesday by the federal Bureau of Economic Analysis. The estimate, which had been delayed by the government shutdown, shows that the economy remained resilient over a three-month period that saw fewer new tariffs announced and consumers shopping for back-to-school goods.
If confirmed, the reading that covered the months of July, August and September would be the best quarter of growth for the U.S. economy in two years, since the same period in 2023.
Analysts and economists surveyed by Dow Jones had expected an increase of 3.2%.
The expansion in economic output, or GDP, was fueled by “increases in consumer spending, exports, and government spending,” the BEA said. “Imports, which are a subtraction in the calculation of GDP, decreased.”
Consumer spending this year has increasingly been characterized by a growing divide between wealthy households that aren’t changing their habits amid rising costs of living, and middle and lower income households that have cut back in response to a weaker labor market and tariffs and inflation that both drive up the cost of daily expenses.
“The TARIFFS are responsible for the GREAT USA Economic Numbers JUST ANNOUNCED,” Trump wrote on Truth Social after the GDP announcement. “AND THEY WILL ONLY GET BETTER!”
Trump also said there is “NO INFLATION,” however inflation has increased notably since April, hitting 3% in September before declining to 2.7% in November. However, economists widely believe the November decline to be due to the lack of data that was collected during the government shutdown.
With Tuesday’s new data, the overall rate of growth for the first three quarters of the year averages out to only 2.5%, however. This is because the economy shrank 0.6% in the first three months of the year, before growing by a stronger rate of 3.8% from April 1 to June 30.
For a sense of how that compares to prior years, the average growth rate in 2024 for the whole year was 2.4%. The year before, the U.S. economy grew at an average rate of 3.4%, fueled by some of the final waves of post-pandemic recovery.
Tuesday’s number is only an “initial estimate,” the first of three revisions that will be made as more data comes in. The third-quarter growth rate was originally scheduled to be released on Oct. 30, but was delayed because of the historically long government shutdown.
One of the biggest drivers of the reading was consumer spending, which rose 3.5% on an annual rate, the best since the end of 2024.
The category of “services” figured prominently in that higher spending, with health care and international travel accounting for most of the gains.
“Within health care, both outpatient services as well as hospital and nursing home services increased,” the bureau said.
Some of this increased spending may be putting households deeper into debt, however. Credit card balances rose by $24 billion during the third quarter, for an overall level that was 5.75% higher than a year ago, according to the Federal Reserve Bank of New York’s 2025 third quarter data.
But “consumer spending had been volatile this year and the softening labor market implies a slower pace of spending next year,” wrote Citigroup economists after reviewing Tuesday’s report.
“Despite the data center mania, investment in non-residential structures contracted at a 6.3% pace,” Paul Ashworth, chief North America economist at Capital Economics noted. “At face value, that suggests the AI boom might have taken a step backwards, after driving GDP growth in the first half of the year.” However, he noted more data may be required before a definitive call.
Stocks traded around the flat line and Treasury yields rose slightly following the release.
Although some economic indicators are better than economists had projected, surveys measuring how consumers feel about the state of the economy paint a different picture.
The University of Michigan’s Surveys of Consumers data for December found that consumer sentiment about the economy actually improved in the first part of this month, compared to the same period in November.
However, when compared to December 2024, consumer sentiment dropped by nearly 29%.
The latest Conference Board Consumer Confidence Index data for December found that consumers’ confidence in the economy dropped by 3.8 points from the previous month. This rating is “well below this year’s January peak,” Dana M. Peterson, chief economist at the Conference Board, a business group, said in a release.
Peterson added that inflation and tariffs were among the top factors consumers said were affecting the economy.
An NBC News Decision Desk Poll released in December found that consumers’ feelings about their personal financial situations is more of a mixed bag.
While 35% of respondents said their finances are worse now, 41% said their situation is about the same as last year. Only 24% said their finances are better than in 2024.