United States: Economic growth accelerates in the third quarter of 2025
GDP reading: The United States’ GDP expanded 4.4% in seasonally adjusted quarter-on-quarter annualized (SAAR) terms in Q3, following 3.8% growth in the prior quarter. Q3’s reading was the strongest since Q3 2023 and the highest in the G7. On a year-on-year basis, economic output expanded 2.3% in Q3, following a 2.1% expansion in the previous quarter.
Broad-based expansion: Compared with the prior quarter’s data, figures in Q3 improved for private consumption (+3.5% in seasonally adjusted quarter-on-quarter annualized (SAAR) terms vs +2.5% in Q2), government consumption (+2.2% vs -0.1% in Q2), exports of goods and services (+9.6% vs -1.8% in Q2) and imports of goods and services (-4.4% vs -29.3% in Q2). In contrast, the reading for fixed investment worsened in Q3 (+0.8% vs +4.4% in Q2).
Panelist insight: On the latest reading and the outlook, TD Economics’ Thomas Feltmate said:
“The U.S. economy maintained considerable momentum in the third quarter, despite headwinds. Consumer spending recorded another solid quarter, while capital expenditures continued to expand at healthy clip, aided by further investments in AI but also some broadening to more traditional forms of equipment spending. As we round the corner to close out 2025, today’s Q3 GDP data feels somewhat stale. We know Q4 got off to a very rocky start, as a record long six-week government shutdown resulted in over 650,000 federal employees being temporarily furloughed without pay. This will exert a meaningful drag on near-term activity.”