The US economy surged in the three months leading up to September. Consumer spending rose significantly, and exports saw an uptick too. Overall, the economy grew at an annual rate of 4.3%, an impressive jump from 3.8% the quarter before. This growth marks the strongest performance in two years and exceeds most expectations.
This report, previously delayed by a government shutdown, reveals an economy adapting to changes in trade and immigration policies. Despite ongoing inflation and budget cuts, the economy remains robust. “This is an economy that has defied doom and gloom expectations since early 2022,” explains Aditya Bhave, a senior economist at Bank of America. He sees continued resilience ahead.
Consumer spending increased by 3.5% compared to 2.5% in the prior quarter. Households are spending more on healthcare, which is helping drive this growth even as the job market shows signs of slowing down. Imports, which negatively affect growth, are down, partly due to tariffs introduced earlier. Exports bounced back, surging by 7.4%, while increased government spending, particularly in defense, further boosted the economy.
Michael Pearce, chief US economist at Oxford Economics, believes the economy is well set for 2026, especially with tax cuts coming into play and the Federal Reserve likely lowering interest rates. He emphasizes that the fundamentals indicate solid growth potential.
However, challenges remain. Inflation is affecting households differently. Recent reports show the personal consumption expenditures price index, a key measure of inflation, rising to 2.8% from 2.1%. This uptick affects lower and middle-income families more than wealthier ones. Oliver Allen, a senior economist at Pantheon Macroeconomics, raises concerns that households may be tightening their belts due to stagnant incomes and decreased savings from the pandemic era.
So, while the economy is showing encouraging signs, the pressure of rising costs may hinder sustained growth. Consumers are reacting to these changes online too, with conversations about budgeting and spending habits trending on social media platforms. Keeping an eye on these social trends can provide insights into future economic shifts.
For more in-depth analysis, consider checking the [latest reports from the Bureau of Economic Analysis](https://www.bea.gov) or follow news from platforms like Bloomberg for updated economic data.
