U.S. Gross Domestic Product (GDP) growth was so strong in the third quarter that even the far-left New York Times admits that it was “vigorous” and unhindered by Republican President Donald Trump’s reciprocal tariffs.
Real gross domestic product (GDP) increased at an annual rate of 4.3% in the third quarter of 2025 – the highest rate since it grew 4.7% in the third quarter of 2023 – according to the initial estimate released Tuesday by the U.S. Bureau of Economic Analysis (BEA).
The 4.3% increase not only bested the second quarter’s 3.8% growth, it also far surpassed analysts’ expectation of a 3.0% rise.
“The U.S. economy grew at a vigorous pace through the end of September, despite the uncertainty created by tariffs and widespread concerns about affordability among households,” The New York Times acknowledged Tuesday:
“U.S. Economic Growth Surged in Third Quarter of 2025”
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“[T]he roughly $30 trillion economy started October on relatively solid footing as a whole, outperforming the bearish expectations of some experts only months before.
“‘Even as consumption take the reins back from investment, the economy maintains considerable momentum,’ said Paul Ashworth, chief North America economist at Capital Economics.”
The increase in real GDP in the third quarter reflected increases in consumer spending, exports, and government spending (both state and federal) that were partly offset by a decrease in investment. Federal spending was led by defense consumption expenditures.
Under Trump’s reciprocal tariffs, U.S. exports increased 8.8%, while imports (which are a subtraction in the calculation of GDP) fell by 4.7%, BEA reports:
“Within exports, both goods and services increased. The increase in goods was led by capital goods except automotive, as well as nondurable consumer goods. The increase in services was led by other business services, which includes professional and management consulting services.
“Within imports, a decrease in goods (led by nondurable consumer goods) was partly offset by an increase in services (led by other business services).”
Real final sales to private domestic purchasers, the sum of consumer spending and gross private fixed investment, increased 3.0% in the third quarter, compared with an increase of 2.9% in the second quarter.
Consumer spending, which accounts for about 70% of U.S. economic activity, rose to a 3.5% annual pace in the third quarter, up from 2.5% in the second quarter.
The increase in consumer spending reflected increases in both services and goods. Within services, the leading contributors were health care and other services. Within goods, the leading contributors were recreational goods and vehicles, as well as other nondurable goods. Within health care, both outpatient services as well as hospital and nursing home services increased.
The third quarter’s robust GDP growth suggests that interest rates will hold steady, as the Federal Reserve won’t feel the need to cut its benchmark lending rate a fourth straight time in an effort to spur the economy when it meets in January.
