The US economy showed greater momentum than expected during the summer of 2025. Between July and September, productive activity advanced strongly and made it clear that growth not only held steady but accelerated compared to the previous quarter. The data confirms that the economic engine kept running despite an environment marked by inflationary pressures and adjustments in investment. According to the Bureau of Economic Analysis (BEA) initial estimate, real gross domestic product (GDP) increased at an annual rate of 4.3% in the third quarter of 2025. In the April-June period, growth had been 3.8%. This result significantly exceeded market forecasts, which pointed to growth of around 3%. The BEA explained that this publication replaced the usual preliminary estimates due to the recent federal government shutdown. The increased economic dynamism was supported on several fronts. Consumer spending regained strength and consolidated itself as the main driver of growth. Exports also showed a significant recovery, as did government spending. These gains partially offset the decline in private investment. Imports, which are subtracted from GDP, decreased during the quarter. This factor contributed positively to the final result. Compared to the second quarter, the economy also benefited from a smaller contraction in investment and a clearer rebound in household consumption. Consumer spending, which accounts for about 70% of the country's economic activity, grew at an annual rate of 3.5% between July and September. In the previous quarter, it had increased by 2.5%. This jump reflects that households continued to spend despite high prices and a tighter financial environment. Another relevant indicator was real final sales to domestic private buyers. This metric, which combines consumption and private fixed investment, advanced 3.0% in the third quarter. In the previous period, the increase had been 2.9%.The data suggests strong and relatively stable domestic demand. Inflation, however, remains a point of concern. The Gross Domestic Purchases Price Index rose 3.4% year-on-year, up from 2.0% in the second quarter. The Personal Consumption Expenditures Index, a key indicator for the Federal Reserve, climbed 2.8%, compared to 2.1% previously. Excluding food and energy, core PCE inflation stood at 2.9%. In the April-June quarter, it was 2.6%. These levels confirm that inflationary pressures persist and could influence upcoming monetary policy decisions. On the income side, real gross domestic income (GDI) increased 2.4% in the third quarter. In the second quarter, it had grown 2.6%, according to revised figures. The average between real GDP and real GDI advanced 3.4%, showing a more balanced picture of economic performance. Corporate profits also surprised. Earnings from current production increased by $166.1 billion, following a much more modest gain of $6.8 billion in the previous quarter. This rebound suggests a favorable environment for many companies. You may also be interested in:

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