The US economy just pulled off a major surprise, growing way faster than anyone anticipated in the third quarter of 2025.
According to the latest final numbers from the Bureau of Economic Analysis (BEA), the economy expanded at an annualized rate of 4.4% during July, August, and September. To put that in perspective, economists were only expecting about 3.3% growth. Not only did we beat the forecast, but this is also the fastest growth sprint we’ve seen in two years.
This is a solid jump from the 3.8% growth we saw in the second quarter and a massive turnaround from the sluggish start to the year when the economy actually shrank by 0.6%. If you average it all out, we’re looking at a steady 2.5% growth rate for the first nine months of 2025.
So, what’s driving this surge?
In short: we are. Consumer spending is up, but it’s not just that. Exports, government spending, and business investments are all climbing, while imports have dropped off.
The BEA noted that compared to earlier in the year, private investment and government spending really picked up the slack, and shoppers continued to open their wallets. A key metric that tracks private demand (consumer spending plus investment) rose by 2.9%, signaling that the core of the economy is on solid footing.
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Defying expert predictions, the U.S. economy shifted into high gear during the third quarter, marking its fastest pace of expansion in two years.
The Commerce Department’s final reading shows GDP hit an annualized rate of 4.4% for the period covering July through September. That figure handily beat the 3.3% growth that economists had forecasted.
This performance builds on momentum from the second quarter, where the economy grew by 3.8%, effectively erasing the contraction we saw at the start of 2025. Taken as a whole, the U.S. economy has maintained a healthy 2.5% annualized growth rate through the first three quarters of the year.
Key Drivers of Growth:
The Bureau of Economic Analysis attributes this acceleration to a broad-based recovery. Americans are spending more, exports are rising, and both government and private investments are ticking upward.
Essentially, all cylinders are firing. “Real final sales to private domestic purchasers”—a fancy term for private spending and investment—rose nearly 3% this quarter. The data suggests that despite earlier headwinds, domestic demand remains resilient and strong.
