Federalbrief
Dec 24, 2025

NEW: Trump Economy Officially Booming After Best GDP Report In Years Y

The U.S. economy roared ahead at a sizzling 4.3% annual rate in the third quarter, posting its strongest growth in two years despite a year marked by disruptions and political battles.

Gross domestic product, the government’s official measure of economic output, expanded briskly for a second straight quarter, federal officials reported Tuesday. The GDP report arrived two months late due to a government shutdown that delayed its release.

The strong summer showing followed a solid 3.8% growth rate in the spring, putting the economy on track to comfortably exceed 2% growth for the full year, depending on how the final weeks of the fourth quarter shake out. Economists expect growth to cool somewhat late in the year, in part because of damage tied to the shutdown.

Even so, growth of 2% or more would mark a notable win for an economy that spent much of the year battling inflation pressures, higher interest rates and trade-related uncertainty. The economy’s staying power also sets the stage for another year of solid expansion in 2026.

Consumers once again did much of the heavy lifting. Consumer spending, the main engine of the U.S. economy, climbed at a robust 3.5% annual rate in the third quarter, driven largely by purchases of recreational goods and vehicles.

Some of that spending appears to reflect households rushing to get ahead of tariff-driven price hikes, raising questions about how long the momentum can last. At the same time, consumers are increasingly directing their dollars toward necessities such as health care, car repairs and insurance rather than discretionary splurges, a shift that helps explain why consumer sentiment surveys remain gloomy.

Businesses also stepped up, with investment in equipment providing another major boost. Spending on information-processing equipment, particularly tied to artificial intelligence, jumped 8.4% in the third quarter. That surge helped offset weakness among more traditional manufacturers outside the tech sector.

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