US Economy Surges 4.3% in Q3 Driven by Spending and Exports, Despite Investment Dip and Labor Market Weakness
US economy grew 4.3% in Q3, driven by consumer spending, exports, and government spending. Investment decreased, while labor market weakness and inflation persist.
Overview
The U.S. economy achieved a robust 4.3% annualized growth rate in the third quarter, marking its most rapid expansion in two years and surpassing analyst predictions.
This significant economic surge was primarily fueled by strong consumer spending, which rose at a 3.5% annual pace, alongside increased government and export expenditures.
Exports grew at an 8.8% rate, and falling imports positively impacted GDP calculations, though a decrease in investment partially offset the overall growth.
Despite strong GDP growth, the labor market showed weakness, with unemployment rising to 4.6%, its highest since 2021, coupled with a sharp slowdown in hiring.
Inflation remains a concern, with Core PCE increasing to 2.9%, and economists anticipate a potential slowdown in fourth-quarter GDP growth, partly due to a government shutdown.
Analysis
Center-leaning sources frame this story by highlighting the surprisingly strong 4.3% Q3 GDP growth with positive, evaluative language. They emphasize how the economy "defied concerns" and "chugged higher" despite existing worries, often presenting caveats about consumer debt or labor market weakness as secondary to the robust growth.
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FAQ
The US GDP grew at an annualized rate of 4.3% in Q3 2025, surpassing economist expectations of 3.3%.
Growth was primarily driven by consumer spending at 3.5%, exports at 8.8%, and government spending, despite a decrease in investment.
Q3 growth of 4.3% accelerated from 3.8% in Q2 and followed a 0.6% contraction in Q1, marking the strongest expansion in two years.
Unemployment rose to 4.6%, the highest since 2021, with a sharp slowdown in hiring.
Economists anticipate a potential slowdown in Q4 GDP growth, partly due to a government shutdown; the Atlanta Fed's GDPNow estimates 3.0% as of December 23.
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