US GDP Grows At 4.3% In Q3, Economy Expands At A Faster Clip Than Wall Street Estimates

• The BEA report also stated that consumer spending continued to rise in the July-October period, growing at an annualized rate of 3.5%, increasing from 2.5% in Q2.
• The report added that investment in equipment and intellectual property cooled, growing at 5.4% each, down from 8.5% and 15% in Q2, respectively.
• The Fed’s primary inflation gauge, the Personal Consumption Expenditures (PCE) price index, rose 2.8% during Q3, compared to an increase of 2.1% in Q2.

The United States’ gross domestic product (GDP) for the third quarter (Q3) grew at a faster pace than expected, driven by consumer spending, exports, and government spending.

The Bureau of Economic Analysis reported that the U.S. economy grew at an annualized rate of 4.3%, higher than the Dow Jones forecast of 3.2%, as cited by MarketWatch.

The second-quarter (Q2) GDP growth estimate was revised upward to an annualized rate of 3.8%, according to a September BEA report.

Compared to Q2, the acceleration in real GDP in the third quarter reflected a smaller decrease in investment, an acceleration in consumer spending, and an upturn in exports and government spending, the BEA stated.

Consumer Spending Expands

The BEA report also stated that consumer spending continued to rise in the July-October period, growing at an annualized rate of 3.5%, increasing from 2.5% in Q2.

The report added that investment in equipment and intellectual property cooled down compared to the previous quarter, growing at a pace of 5.4% each. In Q2, investment in equipment grew by 8.5%, while investment in intellectual property grew by 15%.

Inflation Picks Up

The report also showed that Inflation picked up in the third quarter. The Fed’s primary inflation gauge, the Personal Consumption Expenditures (PCE) price index, rose 2.8% during Q3, compared to an increase of 2.1% in Q2.

Core PCE, which excludes food and energy, rose 2.9% in Q3, compared to Q2’s 2.6% increase.

Trump Says Tariffs Boosted US Economy

Following the release of the GDP data, President Donald Trump said in a post on Truth Social that tariffs are responsible for the growth.

“The TARIFFS are responsible for the GREAT USA Economic Numbers JUST ANNOUNCED…AND THEY WILL ONLY GET BETTER! Also, NO INFLATION & GREAT NATIONAL SECURITY. Pray for the U.S. Supreme Court!!!” he said.

Treasury Secretary Scott Bessent said in an interview with Fox Business last week that he expects the Supreme Court ruling on President Trump’s tariffs in January.

Meanwhile, U.S. equities declined in Tuesday’s opening trade. At the time of writing, the SPDR S&P 500 ETF (SPY), which tracks the S&P 500 index, was down 0.03%, the Invesco QQQ Trust ETF (QQQ) declined 0.19%, while the SPDR Dow Jones Industrial Average ETF Trust (DIA) fell 0.06%. Retail sentiment around the S&P 500 ETF on Stocktwits was in the ‘neutral’ territory.

Also See: RKLB Stock Has Gained Over 92% In A Month – Why Does Needham Believe There's Potential For More?

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