The BLS released the GDP for the 3Q and it showed strong growth but higher inflation:
- Preliminary GDP for Q3 4.3% vs 3.3% estimate
- Sales 4.6% vs 7.5% last quarter
- Deflator 3.7% vs 2.7% estimate. Prior 2.1%
- Core PCE 2.9% vs 2.9% estimate. Prior 2.6%
- Consumer spending 3.5% vs 2.5% prior
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Decoding the Q3 2025 GDP Growth
The latest data from the U.S. Bureau of Economic Analysis (BEA) reveals that the American economy expanded at a robust 4.3% annualized rate during the third quarter of 2025. This performance exceeded most market expectations, which had centered around a 3.2% expansion.
Based on the provided chart, here is the breakdown of the key contributors to this growth:
The Primary Drivers of Growth
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Consumer Spending (The Engine): Household spending remains the primary catalyst for the economy, contributing +2.40 percentage points to the overall GDP figure. This reflects continued resilience in private consumption despite earlier concerns of a slowdown.
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Exports (Global Demand): Strong international demand for American products and services added +0.90 percentage points to the growth rate.
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Imports (Calculation Quirk): According to the BEA, imports are a subtraction in the GDP formula. A decrease in imports resulted in a +0.65 percentage point positive contribution to the final figure.
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Government Spending: Public sector expenditures provided a modest tailwind, contributing +0.40 percentage points to the quarterly expansion.
The Sole Headwind
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Investment: Private domestic investment was the only negative contributor in the chart, shaving -0.02 percentage points off the total. This suggests a slight caution among businesses regarding capital expenditures or residential housing activity during the quarter.
The Bottom Line
With a 4.3% growth rate, the U.S. economy remains significantly stronger than many global peers
