U.S. economic growth outperformed expectations in the third quarter, driven by resilient consumer spending, increased federal outlays, and a more favorable trade balance, underscoring strong momentum heading into year-end.
The U.S. economy delivered a stronger-than-expected performance in the third quarter, recording its fastest year-over-year growth since the third quarter of 2023. According to data released by the Bureau of Economic Analysis (BEA) following the end of the federal government shutdown, gross domestic product (GDP) expanded 1.1% compared with the second quarter and surged 4.3% on an annual basis—well above analysts’ forecasts.
This release marks the first GDP report published since September, after a 43-day federal government shutdown that ran from October 1 to November 12 delayed the dissemination of key macroeconomic indicators. The shutdown postponed not only GDP figures but also critical data on inflation, employment, and the trade balance.
Private consumption was the main driver of growth. Between July and September, consumer spending advanced at a 3.5% annualized rate, reaffirming its role as the backbone of U.S. economic activity. This performance underscores the resilience of domestic demand, even amid tighter monetary conditions and ongoing trade frictions.
By contrast, capital investment declined by 0.3%, while government spending increased 2.2%, reflecting higher federal outlays. Within this category, central government spending rose at a 2.9% annualized pace, led by a 5.8% increase in defense expenditures. This trend aligns with the policy stance of the administration of Donald Trump, which has emphasized strengthening the country’s military capacity.
External trade also played a significant role in the quarter’s performance. U.S. exports climbed 8.8%, while imports fell 4.7%. This dynamic points to the impact of more restrictive trade policies and the so-called “reciprocal tariffs” announced in April as part of the government’s broader trade strategy.
The report released this week represents the first official estimate of third-quarter economic performance, originally scheduled for publication on October 30 but postponed due to the administrative shutdown of the federal government.
For the labor market and professional services sector, the stronger-than-expected figures at year-end reinforce a scenario of heightened activity, sustained demand, and a growing need for operational efficiency. Solid growth in consumer spending and public expenditure typically translates into increased business activity, greater outsourcing of services, and rising demand for flexible, specialized talent across the U.S. economy.
