5 questions about the latest economic growth report

1. How fast is the U.S. economy growing right now?

The U.S. economy grew at a 4.3% annual rate in the third quarter (July through September), according to the Bureau of Economic Analysis. This marks the fastest pace in two years and represents an improvement from the 3.8% growth recorded in the second quarter, giving the economy three straight months of solid expansion.

2. What’s driving this economic growth?

The GDP increase was fueled by three main factors: stronger consumer spending, rising exports, and increased government spending. Consumer spending, which accounts for about 70% of U.S. economic activity, rose to a 3.5% annual pace last quarter, up from 2.5% in the previous quarter. Government consumption and investment also grew by 2.2%, boosted by increased state and local expenditures and federal defense spending, while total corporate profits increased by $166 billion.

3. Is inflation still a concern despite this growth?

Yes, inflation remains higher than the Federal Reserve’s target. The personal consumption expenditures index (PCE), the Fed’s preferred inflation measure, climbed to a 2.8% annual pace last quarter from 2.1% in the second quarter. Core PCE inflation, which excludes volatile food and energy prices, rose to 2.9% from 2.6%, though the White House points to core inflation’s decline to a five-year low as a positive sign.

4. How are Republicans using these numbers politically?

President Trump and Republicans are crediting the growth to their economic policies, including tariffs, the One Big Beautiful Bill Act, deregulations, and revised trade deals. Mr. Trump specifically claimed the tariffs are “responsible for the great USA economic numbers,” while Republican leaders like House Budget Committee Chairman Jodey Arrington are calling it proof that their “pro-growth policies” are “laying the foundation for an economic renaissance” heading into the midterm election cycle.

5. Are there any concerns about the sustainability of this growth?

Some economists have raised cautions about the report’s details. Joel Griffith from Advancing American Freedom warned that private investment declined and healthcare spending accounted for a significant share of growth. He noted that consumer spending rose while real wages saw only limited increases, suggesting “families going further into debt to finance purchases.” Additionally, Democrats point to their recent election victories as evidence that voters remain concerned about rising costs of housing, energy, and groceries despite the positive GDP numbers. 

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