The US economy gathered pace in the three months to September, driven by a surge in consumer spending and a rise in exports. The world’s largest economy expanded at an annual rate of 4.3% up from 3.8% in the previous quarter. The result beat expectations and marked the strongest growth in two years. The data, released after delays caused by a US government shutdown, offers a snapshot of an economy navigating sweeping changes to trade and immigration policies, alongside persistent inflation and reductions in government spending. While these pressures have triggered sharp fluctuations in areas such as imports and exports, the broader economy has remained resilient, maintaining solid momentum and out performing many forecasts.
This is an economy that has defied doom and gloom expectations basically since the beginning of 2022, said Avidity B have, senior economist at Bank of America. Speaking to the BBC’s Business Today programmer, Mr B have described the US economy as very, very resilient. I don’t see why that wouldn’t continue going forward, he added. Overall growth in the third quarter was far stronger than anticipated, with most analysts forecasting an annual pace of around 3.2% The expansion was fueled by a jump in consumer spending, which rose at an annual rate of 3.5% up from 2.5% in the previous quarter. That increase came despite a cooling job market, as households spent more on healthcare services. Imports which subtract from economic growth continued to fall, reflecting a wave of tariffs on goods entering the US announced by President Donald Trump earlier this spring. Exports, which had declined sharply in previous months, rebounded strongly, surging 7.4% Government spending also picked up, led by higher defense outlays. Those gains helped offset a slowdown in business investment, including in intellectual property, and ongoing weakness in the housing market. High interest rates have continued to weigh on affordability and exacerbate supply constraints.