Resilient Growth: US Economy Sees Fastest Expansion in Two Years

Wed Dec 24 2025 05:49:37 GMT+0200 (Eastern European Standard Time)

Despite facing significant challenges, the US economy has recorded a growth rate of 4.3% in the latest quarter, surpassing expectations and indicating strong consumer spending and export recovery.

The US economy has experienced its fastest growth in two years, expanding at an annual rate of 4.3% in the third quarter of 2025, driven by increased consumer spending and a surge in exports. This unexpected growth highlights the resilience of the economy, which has navigated through trade challenges and inflation pressures effectively. Economists express optimism for continued growth, despite concerns regarding rising prices affecting lower and middle-income households.

The US economy picked up speed over the three months to September, as consumer spending jumped and exports increased.

The world's largest economy expanded at an annual rate of 4.3%, up from 3.8% in the previous quarter. That was better than expected and marked the strongest growth in two years.

The report, which had been delayed by the US government shutdown, sheds light on an economy that has been buffeted by dramatic changes to trade and immigration policies, as well as persistent inflation and cuts to government spending.

But while that has led to sharp swings in some areas, such as imports and exports, the underlying economy has maintained solid momentum, outperforming many forecasts.

This is an economy that has defied doom and gloom expectations basically since the beginning of 2022, said Aditya Bhave, senior economist at Bank of America.

Speaking to the BBC's Business Today programme, Mr. Bhave described the economy as very very resilient.

He added, I don't see why that wouldn't continue going forward. The overall growth figure for the third quarter was much stronger than expected, with most analysts anticipating an annual pace of about 3.2%.

Consumer spending rose at an annual rate of 3.5%, compared with 2.5% in the previous quarter, despite a slowing job market, as households spent more on healthcare services.

Imports continued to decline due to tariffs on shipments entering the US while exports surged by 7.4%. Government spending also rebounded, driven by defense outlays.

However, a slowdown in business investment and challenges in the housing market due to high-interest rates have raised concerns. Michael Pearce, chief US economist at Oxford Economics, emphasized that underlying measures align with solid expansion.

Despite the good news, analysts warn that rising prices could deter sustained growth, particularly for lower and middle-income households. The inflation gauge ticked up to 2.8%, increasing cost pressures for these families.

Oliver Allen, senior US economist at Pantheon Macroeconomics, noted that households are beginning to cut back on spending, affected by stagnant real incomes and a weak labor market.