Q3 GDP Grew 4.3%
Better late than never numbers are better than the vibes suggested.
Via NPR: The U.S. economy grew robustly as Americans continued to spend.
The U.S. economy grew robustly in July, August and September, powered by steady consumer spending, especially on health care.
The gross domestic product — the broadest measure of the nation’s economic activity — for the third quarter grew at an annual rate of 4.3%, much faster than the 3.8% expansion seen between April and June, according to the Commerce Department on Tuesday.
Growth has picked up from the early months of 2025, when the U.S. economy actually shrunk at an annual rate of 0.6% as President Trump prepared sweeping global tariffs.
These numbers should have been out in October, but the government shutdown delayed their release. I will confess that it is a healthier number than I expected. I will also say that growth fueled by health care spending doesn’t seem ideal, but that is just an initial impression.
Here’s a longer-term comparison by quarter. Q3 of 2024 grew at a 3.3% rate, and Q3 of 2023 was at 4.7% for some other comparative notes.
I expect there will be some crowing from the usual suspects in the administration, as well as some skepticism from the opposition. I would suggest that overreaction and overgeneralization is probably a bad idea one way or the other.
Some other economic numbers:
Inflation has been cooling off notably, with consumer prices rising a modest 2.7% in November from a year earlier. Some food items have continued to drop in price, but not enough to offset the growing big costs, like rent, electricity and health insurance.
On average, workers’ wages have been growing faster than prices. But those wage gains have slowed in recent months as the softening job market has chipped away at workers’ bargaining power for higher pay. Wealthier shoppers have been propping up much of U.S. spending at stores and restaurants.
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There was a big political focus on egg prices for a while. But that was driven by bird flu, not economic policy, and prices seem to have settled out. Now Rs can brag about low egg prices. I confess I’ve been nervous about the focus on “affordability”. GOPs aren’t very good at economic management, but Biden left the economy in pretty good shape and reversion to the norm is … well … the norm.
There is no guarantee the economy will stay flat and Ds can’t be seen as rooting for a bad economy. Tariffs are a bad thing, but their inflationary effect is one-and-done. They raise prices as they take effect and as suppliers adjust, but then prices become stable at the higher price. “Affordability” may still work in ’26 but we’d better find something better for ’28. My thought is don’t focus on policy, the electorate don’t care about policy, focus on ridiculing Trump and tarring Vance, Rubio, et al by association. GOPs make it so easy to ridicule them.
I guesstimate the economy grew perhaps 0.2-0.4%, the rest was how much the leveraged AI bubble grew.
Round and round the wall street tree,
The money chased the bubble,
They ran and ran and had great fun,
Pop! Goes the bubble!
Good nominal figures. but as @Kathy: says: how much of this is related to an AI investment bubble?
A quick look at the figures shows the main driver as consumer spending.
But a lot of that is likly, imho, to be based on financial assets appreciation.
Which in turn relates to a stock market whose indices are inflated by AI optimism.
Manufacturing output seems to remain roughly flat, as do general services.
I’d not break out the champagne quite yet.
Doesn’t really matter; the vibes are bad. Employee pay went up in some sense, but money that employers pay towards healthcare is counted in that increase. So it’s not something that shows up in your paycheck. And people don’t notice core inflation; they notice rent prices, house prices, and so on, and those keep going up.
Adults’ expectations of what prices for everything should be are still anchored pre-COVID, and until prices get back down there, which would be a disaster if that happened, they’re going to complain about inflation. And Trump’s doing what Biden did, which was wave statistics around that no one believes, because it doesn’t match what they expect.