US economic growth surges in 3rd quarter, highest rate in two years

TDT | New York

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US economic growth in the third quarter came in at 4.3 percent on an annualized basis, easily topping expectations, according to Commerce Department data released Tuesday.

The report, which also showed an acceleration in inflation, provides reassurance about the world’s largest economy after other recent data showing a weakening labor market. It comes as worries have moderated over President Donald Trump’s tariffs and as large tech companies advance massive investments to build new artificial intelligence infrastructure.

The gross domestic product report -- delayed for nearly two months due to a government shutdown -- reflects increases in consumer spending, exports and government spending, partially offset by a decrease in investment, according to the department’s Bureau of Economic Analysis.

The reading, an initial estimate expected to be updated in early 2026, marks the highest GDP in two years. Analysts had expected 3.2 percent growth, according to consensus estimates from MarketWatch and Trading Economics.

The report also showed the price index for domestic purchases rose 3.4 percent, a much higher inflation reading compared with 2.0 percent in the second quarter.

The data suggest faster growth and higher inflation than markets had expected -- potentially changing the calculus for upcoming US monetary policy decisions.

Other recent data has shown a weakening job market that has prompted the Federal Reserve to cut interest rates at the last three meetings, viewing the employment picture as its prime concern even as inflation has lingered above two percent.