The data was delayed by the government shutdown, but today the Bureau of Economic Analysis has released the third quarter GDP {DATA HERE} showing a very strong 4.3% growth. The second quarter was also revised up to 3.8%.
Real GDP increased at an annual rate of 4.3 percent in the third quarter, showing increases in consumer spending, increases in exports, and government spending offset by a decrease in investment. Imports, which are a subtraction in the calculation of GDP, decreased boosting the overall GDP number.
This result is similar to the GDP growth rate cycle we previously saw in 2017 as the MAGAnomic policies and investments into the domestic economy begin to show up. While consumer confidence has struggled due to affordability issues, consumer spending going into the holiday season was very strong.
WASHINGTON – US real gross domestic product rose at an annualized rate of 4.3% in the third quarter, exceeding the 3.3% expected and more than the 3.8% growth in the second quarter.
“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,” the Bureau of Economic Analysis said.
Heather Long, the chief economist at Navy Federal Credit Union, wrote on X that “AI investment wasn’t a big factor” in the third quarter and instead consumption is a “key driver,” particularly due to spending from wealthier Americans.
Real personal consumer spending rose 3.5% in the third quarter, more than the 2.5% rise in the second quarter. Imports again fell, but not by as much as in the second quarter, declining 4.7% in the third quarter and falling 29.3% in the previous quarter. Meanwhile, exports rose 8.8% in the third quarter, after a 1.8% drop in the previous one. (read more)
The Bureau of Economic Analysis will publish an updated GDP estimate for the third quarter on January 22. I would not be surprised to see another upward revision.