Washington, December 24, 2025 —
The United States economy recorded its strongest growth in nearly two years during the third quarter of 2025, surprising market analysts, even as inflation accelerated and raised fresh concerns for policymakers.
According to data released on Tuesday by the US Department of Commerce, the world’s largest economy expanded at an annual rate of 4.3 percent in the July–September period, significantly above the 3.2 percent growth forecast by economists. The release of the report was delayed by nearly two months due to a government shutdown.
Figures from the Bureau of Economic Analysis showed that the robust growth was driven primarily by strong consumer spending, increased exports, and higher government expenditure, while private investment declined slightly during the quarter.
Analysts also pointed to heavy investment by major technology firms in artificial intelligence (AI) infrastructure as a contributing factor to the stronger-than-expected performance, despite broader uncertainty in global markets.
However, the positive growth data was accompanied by a sharp rise in inflation. The price index for domestic purchases climbed to 3.4 percent, up from 2 percent in the second quarter, signalling renewed inflationary pressure that could complicate future monetary policy decisions.
US President Donald Trump hailed the growth figures as proof of what he described as the success of his “genius” tariff policies, calling the current phase an “economic golden age” and insisting that inflation was no longer a concern. Official data, however, showed a clear acceleration in price pressures.
The Federal Reserve has already cut interest rates in its last three policy meetings amid signs of softening in the labour market. Economists say the combination of strong growth and rising inflation could now reignite debate within the central bank over the timing and pace of future rate adjustments.
The Commerce Department noted that the current growth estimate is preliminary and may be revised in early 2026 as more comprehensive data becomes available.
