The U.S. economy expanded at a strong 4.3% annual pace in the third quarter, according to new government data released Tuesday. It beat analyst expectations, and marked the fastest growth rate in two years.
The Commerce Department said gross domestic product surged between July and September. Economists had forecast growth closer to 3%, with some estimates as low as 3.2%. The final figure also represented a clear acceleration from the second quarter’s 3.8% annualized growth rate.
Consumer spending was a major force behind the expansion. Household spending rose at a 3.5% pace in the third quarter. That compared with 2.5% growth in the prior quarter.
Much of the spending went toward services such as health care. Consumers also increased purchases of higher-priced items like recreational vehicles. The data suggests continued confidence among households despite public concerns about the economy.
Exports added significantly to growth. Overseas sales rose at an annual rate of 8.8%. Imports fell another 4.7%, which boosted GDP because imports subtract from economic output.
Government spending also increased during the quarter. That added further support to the overall expansion.
The strong growth came even as worries about inflation, tariffs, and the job market persisted. Bret Kenwell, a U.S. investment and options analyst at eToro, said the economy continues to outperform pessimistic expectations. He noted that recent fears have not derailed overall growth.
President Donald Trump responded quickly to the report. In a post on Truth Social, Trump wrote, “The TARIFFS are responsible for the GREAT USA Economic Numbers JUST ANNOUNCED…AND THEY WILL ONLY GET BETTER!” He also added that the country has “NO INFLATION & GREAT NATIONAL SECURITY.”
Business investment also played a meaningful role. Spending on equipment and intellectual property increased at a 5.4% annual rate. That category includes investments tied to artificial intelligence.
Economists said AI-related capital spending, especially in data centers, has become an important growth driver. Some warned about the pace of investment. Others said the current environment is far more stable than past speculative bubbles.
Sung Won Sohn, a finance and economics professor at Loyola Marymount University, called the report “a pleasant surprise.” He cautioned that some consumer spending was driven by electric vehicle purchases ahead of tax credit expirations in September. He also noted heavy investment by companies such as Microsoft and Google.
Sohn said those firms have strong financial foundations. He argued that the current AI investment cycle is not comparable to the dot-com bubble. He said the spending is supported by real profits and balance sheets.
The GDP report was delayed by a recent federal government shutdown. It is the first official estimate of third-quarter growth. The figures were released as the fourth quarter nears its end.
Some economic indicators remain mixed. The unemployment rate rose to 4.6% in November. That marked the highest level in more than four years.
Retail sales have also slowed. Several large companies, including Home Depot, have reported weaker earnings and outlooks. Inflation remains above the Federal Reserve’s 2% target.
Consumer prices rose 2.7% from a year earlier in November. The increase was smaller than expected. Economists cautioned that the data may have been distorted by collection issues during the 43-day government shutdown.
Despite those concerns, overall growth has remained steady. The latest figures put average annual GDP growth at about 2.5% since Trump returned to office in January. That is roughly in line with last year’s pace under the previous administration.
National Economic Council Director Kevin Hassett echoed Trump’s remarks. He said the 4.3% growth rate reflects the impact of Trump’s economic policies. Republican lawmakers also praised the report.
House Majority Leader Steve Scalise of Louisiana said the country is growing and creating jobs. He said the economy is winning again under Trump’s leadership.
The strong third-quarter report adds momentum to an economy that continues to exceed expectations. Debates over inflation, jobs, and trade policy are likely to intensify as growth remains strong.