The U.S. economy grew at its fastest pace in two years this summer, capping six months of robust growth that economists caution is unlikely to continue.
New data from the Commerce Department on Tuesday — delayed by two months because of the government shutdown — showed that gross domestic product grew at an annualized rate of 4.3 percent between July and September driven mainly by consumer spending and a rise in net exports, as U.S. companies sold more industrial supplies, pharmaceuticals and gold abroad.
“This was the strongest six months of growth since late in 2023, but it certainly didn’t feel that way for most people,” said Diane Swonk, chief economist at accounting firm KPMG. “Consumers are still spending and there’s been extraordinary investment in data centers, but we’re in a very odd situation where the economy is growing without generating jobs.”
Despite the strong growth and recent expansion, many economists are forecasting tepid, if any, growth in the current fourth quarter, largely because of the spending and investment hit from the 43-day government shutdown that began Oct. 1.
GDP, the sum of all goods and services produced in the country, is the broadest measure of the economy.
Tariff-related swings in purchasing habits and trade have weighed heavily on this year’s data, leading to a negative reading in the first three months of the year, followed an unusually high growth rate the next quarter. In the third quarter, growth was boosted by a flurry of car purchases, as Americans bought ahead to avoid the Trump administration’s promised tariffs, but economists say that bump has already passed.
“This report that was supposed to come out in October is very old news,” said Chris Rupkey, chief economist at FwdBonds, a financial markets research company.
Economists generally expect GDP growth for the full year will come in around 2 percent, which is considered solid but not strong.
For businesses nationwide, 2025 has so far been marked by deep uncertainty. Many have held off on large purchases and hiring as they wait to see how tariffs, immigration rules and other Trump administration polices play out.
At Pretzel Pete, which makes salty snacks in smoky Gouda and margarita varieties, owner Karl Brown is dealing with higher costs but says business is up about 20 percent this year. The Pennsylvania-based manufacturer sells about half of its goods abroad, in Germany, Canada and Britain.
Although Brown is paying more for the ingredients he imports — such as cassava flour from India, which has been hit by a 25 percent tariff — he says export demand has increased as a weaker dollar makes American-made goods more attractive abroad.
“I was concerned about our exports this year, but they have not been affected,” he said. “Our business has grown a lot this year. Would it have increased more if the U.S. economy wasn’t as uncertain? Probably. But so far things are fine.”
Still, Brown is closely watching for signs of an impending slowdown. Usually by this time of year, he’d have received at least 15 gift baskets from vendors and suppliers. This year, he’s gotten just one.
“That tells you everything you need to know about how businesses are feeling,” he said.
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