- - U.S. economic growth robust in Q3 before government shutdown

Andrea Riquier, USA TODAYDecember 23, 2025 at 9:33 PM

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The U.S. economy expanded at a strong clip in the third quarter, just before the federal government shutdown likely derailed growth and hiring.

Gross domestic product increased at a 4.3% annualized rate last quarter, the Commerce Department said Tuesday, Dec. 23. The reading is the first estimate of third-quarter GDP, and was delayed by the shutdown. GDP estimates are revised as additional data becomes available.

The reading was much stronger than the 3.3% annual increase forecast by economists polled by Trading Economics.

GDP is a measure of all the goods and services produced in the economy. Its growth in any one quarter is compared to the same time period in the previous year to gauge the strength of the overall economy – or its component parts.

The 4.3% expansion in the late summer “reflected increases in consumer spending, exports, and government spending that were partly offset by a decrease in investment,” the Commerce Department explained in a news release. Imports decreased during the quarter.

Spending on artificial intelligence and the infrastructure needed to power it has kept economic growth humming.

“Q3's strength is unlikely to be sustained,” wrote Oliver Allen, senior U.S. economist at Pantheon Macroeconomics, in an analysis published after the release.

“Even if revisions show that GDP grew by a bit less in 2025 than the latest numbers suggest, growth genuinely seems to have been supported by continued resilience among consumers and the boom in AI (capital spending),” Allen added. “We see clear signs, however, that the tide has turned in Q4, especially in consumption.”

In a separate release out after the GDP figures, the private-sector Conference Board said that consumer confidence declined in December.

“Confidence weakened for a fifth consecutive month as perceptions of business conditions were negative, and apprehensions about jobs and income deepened,” the Conference Board explained. One of the subcomponents of the group’s overall index “has now tracked under 80 for 11 consecutive months, the threshold below which the gauge signals recession ahead,” the release noted.

"The fourth quarter will be an unmitigated disaster with the Federal government shutdown taking a toll," wrote Christopher S. Rupkey, chief economist of FWDBONDS LLC, in a client note. "Markets have never seen economic data that has been this royally screwed up, and it is a miracle that no downturn in activity has taken place to date given the unemployment rate is the highest in years."

Still, Rupkey also highlighted the ongoing AI spending boom as a positive for the economy. "Stay tuned," he concluded.

This article originally appeared on USA TODAY: U.S. GDP growth strong in Q3 before government shutdown

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Source: “AOL Money”