The US economy accelerated sharply in the three months ending September, posting its fastest growth in two years as strong consumer spending and a rebound in exports lifted overall activity. According to the latest data, the world’s largest economy expanded at an annualised rate of 4.3% during the quarter, up from 3.8% in the previous three months and well above market expectations of around 3.2%.
The figures, released after a delay caused by the US government shutdown, offer fresh insight into an economy navigating a period of significant policy shifts, including changes to trade and immigration rules, elevated inflation, and reductions in government spending. Despite these pressures, the broader economy has shown notable resilience, outperforming forecasts that had predicted a sharper slowdown.
Economists said the strong headline growth reflects an economy that has remained unexpectedly robust through much of the past two years. “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 media programme, Bhave described the US economy as “very, very resilient” and said there was little to suggest that momentum would fade in the near term.
A major driver of the latest growth spurt was consumer spending, which rose at an annual rate of 3.5%, up from 2.5% in the previous quarter. This increase came despite signs of a cooling labour market, with households continuing to spend more, particularly on healthcare services. The strength in consumption played a key role in offsetting weaknesses elsewhere in the economy.
Trade also provided a significant boost. Imports, which subtract from overall economic growth, continued to decline amid the impact of tariffs introduced earlier this year. At the same time, exports rebounded strongly, rising by 7.4% after a sharp fall in the previous quarter. Government spending added further support, largely due to higher defence expenditure.
These gains helped counterbalance a slowdown in business investment, including reduced spending on intellectual property, as well as ongoing weakness in the housing market. High interest rates have continued to weigh on home affordability and construction activity, limiting growth in the sector.
Michael Pearce, chief US economist at Oxford Economics, said the economy appeared to be entering 2026 on a relatively firm footing. He noted that upcoming tax cuts and recent interest rate reductions by the US central bank were likely to provide additional support. “Underlying measures are consistent with a solid expansion,” he said.
US President Donald Trump welcomed the data in a social media post, crediting his trade policies and tariffs for the strong performance. His comments come amid growing political pressure, with opinion polls indicating declining public confidence in his handling of the economy.
However, economists cautioned that the pace of growth may be difficult to sustain. Inflationary pressures have picked up, with the Federal Reserve’s preferred inflation gauge—the personal consumption expenditures price index—rising to 2.8% during the quarter, compared with 2.1% previously. Analysts warned that rising prices are increasingly squeezing lower- and middle-income households, even as wealthier consumers continue to spend.
Oliver Allen, senior US economist at Pantheon Macroeconomics, pointed to early signs of strain in household finances. Recent surveys and credit card data suggest consumers are becoming more cautious, he said, as weaker job growth, flat real incomes and the fading impact of pandemic-era savings begin to take their toll.
