Gross domestic product grew at a 4.3% annual rate in the third quarter, the Bureau of Economic Analysis reported Tuesday, an acceleration that should give the Trump administration room to breathe as it confronts poor approval ratings on the economy.
The economy had grown at a 3.8% rate, adjusted for inflation, in the third quarter.
Tuesday’s report, which had been delayed by the government shutdown, showed stronger growth than forecasters expected, and the best quarterly growth rate in two years.
Growth picked up because of stronger consumer and government spending, the agency said.
“The Q3 GDP report suggests the economy maintains brisk momentum, despite tariffs and immigration curbs,” BMO senior economist Sal Guatieri wrote in a note on Tuesday’s release.
The report showed a slight slowdown in business investment, as the factory spending boom of the past few years recedes. Still, investment was buoyed by strong spending on equipment and intellectual property, a possible reflection of the race by artificial intelligence companies to make large capital expenditures.
Tuesday’s report will give President Donald Trump a helpful talking point over the holidays as he tries to beat back Democratic attacks on the economy. Consumer confidence has fallen in recent months to some of the lowest readings on record, in large part because inflation has proved stubborn. That has weighed on Trump’s favorability. A solid majority disapproves of his handling of the economy.
“Today’s blockbuster, expectation-smashing GDP report is the latest proof that President Trump’s America First trade and economic agenda continues to turn the page on the Biden economic disaster: American consumers are spending, and American exports are surging,” White House spokesman Kush Desai said in a statement. “President Trump built the greatest economy in the world in his first term, and he’s in the process of doing it all over again. Americans can count on benefitting from a historic economic boom in 2026.”
Forecasters expect growth to slow in the fourth quarter, especially as that period will include the government shutdown.
Economists also see economic activity cooling into next year, with the Federal Reserve predicting a 2.3% real growth rate for 2026.
Expectations for a Fed rate cut early next year dipped Tuesday morning as investors digested the GDP report.
The Fed has moved to ease monetary policy in recent months in large part because of slowing job growth. Employment gains have dropped in recent months enough to raise the fear of a broader slowdown or recession.
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Yet the continued strong GDP growth should allay those fears and lower expectations for further accommodation from the Fed.
