Real gross domestic product (GDP) grew by 4.3% at an annual rate in the third quarter of 2025, according to the U.S. Bureau of Economic Analysis. This follows a 3.8% increase in the second quarter.
Due to a recent government shutdown, this third-quarter report was released sooner than expected. Initially set for late October, the shutdown caused delays with many major data sources used for GDP estimates.
The rise in GDP reflects a boost in consumer spending, exports, and government spending, even though investment dropped. Interestingly, imports, which reduce GDP calculations, fell as well.
Compared to the previous quarter, the key drivers for the GDP increase included higher consumer spending, a reduction in the decline of investment, and improved government spending. Additionally, imports declined less significantly in this quarter.
Real final sales to private domestic purchasers, which include consumer spending and private investment, rose by 3.0%, an uptick from 2.9% previously.
Price levels also rose. The price index for gross domestic purchases increased by 3.4%, up from 2.0% in the second quarter. The personal consumption expenditures (PCE) price index, which measures how much consumers pay for goods and services, rose by 2.8%.
Experts note that the boost in consumer spending is largely due to increased spending in services, especially healthcare and international travel. For products, recreational goods and prescription drugs saw significant sales.
A notable figure from this quarter is the rise in corporate profits, which increased by $166.1 billion compared to only $6.8 billion in the second quarter. This dramatic jump in profits indicates a possible strengthening in the economy, according to financial analysts.
Some economists are cautious, though. They point out that while growth looks strong, the impact of rising prices could affect long-term consumer behavior. A recent survey shows that nearly 60% of consumers worry about inflation affecting their future spending.
Historical context helps put this growth into perspective. In 2020, the U.S. economy experienced a sharp contraction due to the pandemic, and recovery has been gradual since. The agility shown in navigating economic challenges today highlights lessons learned from past economic crises.
As we reflect on these trends, it’s valuable to note that robust consumer spending and high corporate profits can signal economic vitality. However, inflation remains a concern that both consumers and businesses watch closely.
For further insights on GDP and economic trends, the Bureau of Economic Analysis provides detailed reports and data.
Additional Sources:
- U.S. Bureau of Economic Analysis
- Recent consumer sentiment surveys can be found via The Conference Board.
