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The U.S. economy grew at a faster pace than expected in the third quarter, according to the Commerce Department’s estimate.
The Bureau of Economic Analysis (BEA) on Tuesday released its initial estimate of third-quarter GDP, which showed the economy grew at an annualized rate of 4.3% in the three-month period including July, August and September.
That figure topped the expectations of economists polled by LSEG, who had estimated 3.3% GDP growth in the third quarter.
The report also found that real GDP rose at an annualized rate of 3.8% in the second quarter. That followed a GDP contraction of 0.6% in the first quarter. Taken together, those three readings indicate the U.S. economy grew at a 2.5% annualized rate through the first three quarters of 2025.
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Third quarter GDP was boosted by an acceleration in consumer spending. (Eduardo Munoz/Reuters)
The BEA said that the rise in real GDP in the third quarter reflected increases in consumer spending, exports and government spending that were partly offset by a decrease in investment. Imports also declined in the third quarter.
“Compared to the second quarter, the acceleration in real GDP in the third quarter reflected a smaller decrease in investment, an acceleration in consumer spending, and upturns in exports and government spending. Imports decreased less in the third quarter,” the BEA said.
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The report noted that real final sales to private domestic purchasers – which is the sum of consumer spending and gross private fixed investment – rose 3% in the third quarter, slightly faster than the increase of 2.9% in the second quarter.
The price index for gross domestic purchases rose 3.4% in the third quarter, a notable increase from the 2% increase in the second quarter. The personal consumption expenditures (PCE) index – an inflation gauge that is also measured in a standalone report that can yield different readings – rose 2.8% in the third quarter, compared with an increase of 2.1% in the prior quarter.
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President Donald Trump’s tariffs disrupted international trade earlier this year, which pushed imports higher in the first quarter, which was followed by a decline in the second quarter. (Brendan Smialowski/AFP via Getty Images)
The third-quarter figure is expected to be revised with the release of a subsequent estimate. Typically, the BEA releases an initial estimate, a second estimate and a third estimate that serves as the final revision.
The government shutdown delayed the release of the initial third-quarter estimate, which was due at the end of October. It also affected the release of the second estimate, which was originally scheduled for Nov. 26.
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The BEA said that its initial estimate replaces the advance and second estimates, meaning there will just be one additional third-quarter GDP release. Currently, the BEA’s schedule shows the final third-quarter GDP release on Jan. 22.