Economic growth in the United States accelerated in the three months ending in September, as consumer spending remained robust and exports rebounded.
Government data shows the economy expanded at an annual rate of 4.3%, up from 3.8% in the previous quarter. The economy achieved its strongest growth in two years, coming in well above forecasts.
Officials released the figures after delays caused by the federal government shutdown. They reflect an economy dealing with changing trade rules, immigration policy shifts, inflation pressures, and reduced public spending.
Even with those challenges, overall growth held up.
Consumers continued to spend more during the quarter. Household spending increased at an annual rate of 3.5%, compared with 2.5% in the previous three months. Spending rose despite a cooling job market, with more money going toward services such as healthcare.
Trade figures also supported growth. Exports recovered after a sharp drop earlier in the year, rising 7.4%. Imports fell again, which helped boost overall economic output. The decline in imports followed new tariffs announced earlier this year. Government spending increased as well, mainly due to higher defense costs.
Some parts of the economy struggled. Business investment slowed, including spending on intellectual property. The housing market remained weak as high interest rates continued to limit affordability and reduce new building. Inflation moved higher during the quarter. The Federal Reserve’s preferred inflation measure rose to 2.8%, compared with 2.1% previously.
Economists say higher prices are placing more pressure on lower- and middle-income households, even as wealthier consumers continue to spend.
Looking ahead, opinions are mixed. Some analysts say the economy remains in a solid position as it heads toward 2026, when tax cuts and lower interest rates are expected to provide support. Others warn that recent surveys and spending data suggest households may be starting to cut back. Slower hiring, flat incomes, and shrinking savings are beginning to show.
While the latest data points to strong growth, economists caution that keeping this pace may prove difficult if inflation stays high and consumer spending weakens.
