by Ed Morrissey:
It’s beginning to look a lot like Christmas … for the White House. Just as Democrats tried to force a return to economic policy with their “affordability” rhetoric, the Bureau of Economic Analysis delivered a forceful riposte.
The US economy grew 4.3% in real gross domestic product in Q3 (annualized), the best quarter of growth in the past two years. It exceeds the 3.8% growth in Q2 that had largely been seen as driven by rebalancing of the trade deficit. It’s the first BEA analysis of overall economic activity since September, thanks to the Schumer Shutdown:
Real gross domestic product (GDP) increased at an annual rate of 4.3 percent in the third quarter of 2025 (July, August, and September), according to the initial estimate released by the U.S. Bureau of Economic Analysis. In the second quarter, real GDP increased 3.8 percent.
Due to the recent government shutdown, this initial report for the third quarter of 2025 replaces the release of the advance estimate originally scheduled for October 30 and the second estimate originally scheduled for November 26.
The increase 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, which are a subtraction in the calculation of GDP, decreased.
Just to clarify: “real GDP” already accounts for inflation. This is growth above the rate of inflation, annualized for comparative purposes. The last six months of economic activity has shown a combined growth of 4.0% or a bit better, which is a fantastic momentum by anyone’s reckoning.
Furthermore, the trade numbers no longer appear to be warping the overall measure. In Q2’s report, the high topline GDP number appeared boosted by a -29.3% change in imports, although exports also edged down by -1.8%. Trade stabilized in Q3, perhaps to a new normal in the era of heavier tariffs of -4.7% for imports and an 8.8% increase in exports. That adds to the positive overall assessment on growth, but not unusually so. It appears that Donald Trump’s tariffs have stopped any disruptive effect and have been more or less incorporated into normal economic activity – while favoring US-made products more than before.
Consumer activity also picked up, despite the stagnant job-creation market of Q2 and Q3. Personal consumption expenditures increased by 3.5%, the best reading in 2025, with the increase evenly distributed between goods and services. Private investment declined slightly, but mainly in construction.
The only cautions in this report come in final sales to domestic purchasers (+2.9%) and to private domestic purchasers (+3.0%). That suggests some of the gain went to increased inventories, understandable before the holiday retail season. However, it may show that demand shifted forward from Q4 into Q3, and therefore the next report may not get the same amplitude.
Nevertheless, the news surprised analysts according to the Wall Street Journal, which broke out the U word:
by Matt Margolis:
Democrats just watched economic reality obliterate their favorite doomsday talking point. The U.S. economy grew at an amazing 4.3% annualized rate in the third quarter of 2025, blowing past expectations and handing the Trump administration a massive win heading into 2026.
“The U.S. economy grew at a much greater-than-expected pace in the third quarter, boosted by strong consumer spending, a delayed report released Tuesday showed,” CNBC reported Tuesday morning. “U.S. gross domestic product, a sum of all goods and services produced in the sprawling U.S. economy, expanded by 4.3% in the July-September period, the Commerce Department said in its initial reading of third-quarter growth. Economists polled by Dow Jones expect a gain of 3.2%.”
🚨 BREAKING: US GDP just DESTROYED expectations, surging +4.3% in Q3
"That is a NICE jump! This would be the strongest going back to Q3 2023. THIS IS STRONG!" 🔥🔥
The Experts LOST.
Trump and Scott Bessent were right, again. 🇺🇸 pic.twitter.com/JrHRd1agEa
— Eric Daugherty (@EricLDaugh) December 23, 2025
Maria Bartiromo underscored just how significant the number was on Fox Business. “We’re, we are looking right now at the GDP number at 4.3%,” she said. “This is the actual number, versus an estimate of 3.3%.” She then turned to Mark Tepper, CEO of Strategic Wealth Partners, for his take.
Tepper framed the report as part of a broader economic trend that has consistently surprised to the upside. “So, last week, we talked about inflation coming in lower than expected,” he said. “Now, economic growth is one full percentage point faster than expected. It was supposed to come in at 3.3, came in at 4.3. This is a direct result of everything President Trump has put in place.”
Cue Democrat panic.
He went on to outline several drivers behind the surge, pointing to trade policy, technological gains, and resilient consumers. “Net exports are on the rise because of Trump’s tariff policy, which is leveling the trade playing field,” Tepper explained. “AI’s increasing productivity, businesses are investing in spending, and the consumer remains strong.” He added that even more fuel is on the way. “And just think, next, I think, well, next quarter, they’ll, they’ll end up getting an extra $150 billion in refund checks that they can then, uh, deploy and spend as well.”
Tepper concluded, “So, great number.”
Bartiromo agreed and looked ahead to what could come next.
