By Andreas Plecko
DOW JONES–The US economy grew surprisingly strongly in the third quarter of 2025. As the Ministry of Commerce announced in an initial publication, the gross domestic product (GDP) increased by 4.3 percent compared to the previous quarter and on an annual basis. Economists surveyed by Dow Jones Newswires had expected an increase of 3.2 percent. In the second quarter, US GDP grew by 3.8 percent.
The deflator for personal consumption expenditure (PCE), favored by the US Federal Reserve as a measure of inflation, rose by 2.8 percent in the third quarter after an increase of 2.1 percent in the previous quarter.
The GDP deflator was 3.8 percent after 2.1 percent in the previous quarter. Economists had unanimously expected a rate of 2.8 percent. The GDP deflator measures price developments based on all goods and services produced, excluding import prices. Consumer prices, on the other hand, are collected using a representative shopping basket.
The figures represent the government’s first official estimate of economic growth in the third quarter, although they will not be released until the end of the fourth quarter. Like other federal agencies, the Commerce Department has some catching up to do after the recent federal agency shutdown delayed its GDP release by nearly two months.
Other publications in recent months have raised questions about the underlying strength of the economy. The labor market has weakened, with unemployment rising to 4.6 percent in November, reaching its highest level in more than four years. Retail sales have fallen even as higher-income households continue to spend, and some retailers like Home Depot have reported poor profits and guidance.
Collaboration: Chao Deng
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(END) Dow Jones Newswires
December 23, 2025 08:48 ET (13:48 GMT)