Powered by strong consumer spending, the U.S. economy grew at the fastest pace in two years from July through September, the government said Thursday in a slight upgrade of its first estimate.
America’s gross domestic product — the nation’s output of goods and services — rose at a 4,4% annual pace in the third quarter, the Commerce Department reported Thursday, up from 3.8% in the April-June quarter and from the 4.3% growth the department initially estimated. The economy hasn’t grown faster since third-quarter 2023.
Consumer spending, which accounts for 70% of U.S. GDP, grew at a healthy 3.5%pace. A surge in exports and a drop in imports also contributed to robust third-quarter growth.
The economy has remained resilient despite uncertainty caused by President Donald Trump’s policies, particularly his double-digit taxes on imports from almost every country on Earth.
Despite the strong growth numbers, many Americans are dissatisfied with the state of the economy and especially the high cost of living.
The gap between how consumers say they feel and the strong spending numbers might reflect what is known as a “ K-shaped economy ” In that situation, the income of wealthier Americans is on the rise, due to stock market gains and growing investments, while lower-income households struggle with stagnant pay and high prices.
The job market also looks a lot weaker than the overall economy. Employers have added a lackluster 28,000 jobs a month since March. In the 2021-2023 hiring boom that followed COVID-19 lockdowns, by contrast, they were creating 400,000 jobs a month. Still, the unemployment rate remains low at 4.4%, suggesting a no-hire, no-fire labor market with companies hesitant to bring on new employees but reluctant to let go of the ones they have.
