The United States’ real Gross Domestic Product (GDP) expanded at a stunning annual rate of 4.4% in the third quarter of 2025. These are among the findings from a new report, published by the US Bureau of Economic Analysis (BEA) on Thursday. This figure represents a 0.1 percentage point bump from the first estimate of 4.3%. Most of that upward revision is due to relatively stronger exports and investment, neither of which were net positives in the economy’s growth.
That was a notable upside surprise to market expectations for the second GDP growth estimate. It topped the initial estimate, showing the economy performed better than expected by a greater margin than analysts had forecast. According to the BEA’s preliminary estimate, our economy is primed for very strong economic growth. It too masks the needle-shifting reality of a big downward revision in consumer spending that more than offsets these positive surprises on balance.
Factors Influencing GDP Growth
As the BEA noted, much of this revision was due to large revisions in trade and investment data.
“Real GDP was revised up 0.1 percentage point from the initial estimate, primarily reflecting upward revisions to exports and investment that were partly offset by a downward revision to consumer spending. Imports were revised up.” – US Bureau of Economic Analysis (BEA)
The record growth in exports represents a strong demand for American goods overseas, which is crucial to powering the kind of long-term economic growth that lasts. The increase in investment is indicative of where businesses are growing and now buying more capital, acting as another positive multiplier on economic activity.
The downward revision in consumer spending is alarming. Consumer spending is the most important part of our GDP—making over two-thirds of all economic activity. A drop in this sector raises alarm bells over possible cracks in the bedrock of domestic consumption. If this trend goes unchecked, it will be a drag on future growth.
Market Reactions and Implications
In the aftermath of the positive revision to GDP numbers, the US Dollar Index fell modestly. It decreased by 0.15% and closed at 98.65. This significant movement is indicative of what investors are willing to bet on our economic stability and long-term growth prospects.
Annualizing quarterly GDP totals provides a shorthand way to gauge growth rates. They can just as easily mislead us, with temporary shocks from one quarter rarely persisting for a full year. For instance, the significant downturn witnessed during the first quarter of 2020 due to the COVID-19 pandemic serves as a reminder of how volatile economic indicators can be.
Something economists often like to do is compare quarter over quarter GDP or year over year GDP. This new approach can offer a deeper, more accurate understanding of economic health. This methodology provides a more accurate picture of long-term trends. It protects against the influence of outliers that might skew quarterly numbers.
Looking Ahead
Analysts are still combing over the preliminary GDP data. Next, they’ll be looking at leading economic indicators, or those future indicators that might help to forecast the overall health of the US economy. Consumer confidence, employment rates, and inflation—among other things—will all be key factors in deciding if this growth is here to stay.