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The United States (US) economy posted a surprising and robust 4.3% annualized GDP growth rate in the third quarter of 2025, according to the latest data from the Bureau of Economic Analysis (BEA).
This performance far exceeded the 3.2% growth previously anticipated by Wall Street analysts and represents the strongest quarterly expansion in several years.
Despite concerns expressed in surveys, consumer spending — the main growth engine of the economy — advanced at a 3.5% annualized pace last quarter. That reflected solid outlays on services, including health care and international travel. Spending on motor vehicles fell.
Business investment expanded at a 2.8% rate, driven by another strong quarter for outlays on computer equipment. Investment in data centers, which house the infrastructure for AI, climbed to a fresh record.
Non-defense capital goods shipments including aircraft, which feed directly into the equipment investment portion of GDP, were stronger than expected, indicating some momentum headed into the fourth quarter.
Net exports added about 1.6 percentage points to GDP growth after seesawing in the first half of the year. Goods and services that aren’t produced in the US are deducted from the GDP calculation but counted when consumed. Inventories and residential investment both weighed on growth in the third quarter.
Because swings in trade and inventories have distorted overall GDP this year, economists are paying closer attention to final sales to private domestic purchasers, a narrower metric of consumer demand and business investment. This measure climbed 3%, the most in a year.
The government’s other main gauge of economic activity — gross domestic income — rose 2.4% after a revised 2.6% annualized advance in the second quarter. Whereas GDP measures spending on goods and services, GDI measures income generated and costs incurred from producing those same goods and services.
The report includes fresh figures on corporate profits, which rose 4.2% in the third quarter, the most this year. A measure of after-tax profits for nonfinancial firms as a share of gross value added — a proxy for margins — has tightened this year, though remains well above levels that prevailed from the 1950s to the pandemic.
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