(qlmbusinessnews.com . Mon 29th Dec, 2025) London, UK —
American Economic Resilience Defies Expectations with Strongest Growth in Two Years
The US economy witnessed a robust acceleration in the three-month period ending in September, with a notable leap in consumer spending and a surge in exports contributing to this growth.
Exhibiting its strongest performance in two years, the American economy expanded at an annualised pace of 4.3%, an impressive climb from the 3.8% recorded in the preceding quarter. This expansion surpassed expectations, highlighting the economy's resilience amidst challenges such as changes in trade and immigration policies, persistent inflation, and reduced government expenditure.
The release of these figures, initially delayed due to a US government shutdown, offers a glimpse into the resilience of the economy which has weathered significant uncertainties.
Aditya Bhave, a senior economist at Bank of America, in an interview with the Reporters's Business Today programme, praised the economy's enduring strength. “This is an economy that has defied doom and gloom expectations practically since the start of 2022,” he remarked, expressing optimism for continued robust performance.
Contrary to the prediction of a more modest annual growth rate of approximately 3.2% by most analysts, the third quarter's performance was significantly bolstered by a 3.5% annual increase in consumer spending, up from 2.5% in the previous quarter. This rise comes despite a deceleration in the job market, with households increasing expenditure on healthcare services.
Imports, adversely affecting growth, saw a decline, reflective of the new tariffs on imported goods introduced by President Donald Trump earlier in the year. Conversely, exports experienced a 7.4% surge, and government spending witnessed a rebound, notably in defence expenditures.
This economic upturn managed to counterbalance a deceleration in business investment and a housing market challenged by high interest rates that have exacerbated affordability and supply issues.
Michael Pearce, chief US economist at Oxford Economics, views the economy as well positioned as it progresses into 2026, anticipating benefits from recent tax cuts and interest rate reductions by the US central bank.
President Trump lauded these economic figures on social media, attributing the success to his tariff policies, despite facing criticism over consumer confidence and his economic management.
Nevertheless, concerns linger regarding the sustainability of this growth pace, especially in light of rising inflation impacting lower and middle income households. The personal consumption expenditures price index, the Federal Reserve's preferred inflation measure, rose to 2.8% during this period, up from 2.1% in the preceding quarter.
With indicators such as credit card data and recent surveys suggesting a potential tightening in household spending, the impact of a weak job market, stagnant real incomes, and depleted pandemic-era savings is becoming increasingly apparent, according to Oliver Allen, a senior US economist at Pantheon Macroeconomics.
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