The U.S. economy posted robust growth in the third quarter of 2025, expanding at an annual rate of 4.3% according to the initial estimate released by the Bureau of Economic Analysis. The acceleration from the second quarter’s 3.8% growth rate tells only part of the story, however. A closer examination of the underlying components reveals that the third quarter’s expansion was not only faster but built on a far healthier, more broad-based foundation than the growth recorded earlier in the year. The distin ...

ab 23 December 2025 Global Research US Economic Data Strong Q3 GDP pulls up 2025 growth Source: BEA, Haver, UBS Economics Americas Abigail Watt Economist abigail.watt@ubs.com +1-212-882 6929 Strong GDP to lift annual growth rates The BEA estimates real GDP expanded 4.3% (saar) in Q3, ahead of estimates and which mathematically lifts our 2025 Q4/Q4 and annual average growth rates. As a result we revised up our 2025 Q4/Q4 real GDP projection by ¼ pp to 2.0%. In Q3, real personal consumption expenditures rose ...

Core Viewpoint - The U.S. GDP growth of 4.3% in Q3 is being challenged by economist David Rosenberg, who claims the true growth is only 0.8% due to underlying economic weaknesses masked by government spending and depleted savings [1][3]. Economic Growth Analysis - The BEA reported a real GDP increase from 3.8% in Q2 to 4.3% in Q3, primarily driven by consumer spending, exports, and government spending [2]. - Rosenberg argues that the reported figures are misleading, suggesting that when government spending, shifting import data, and a significant decline in personal savings are excluded, the economy shows minimal expansion [3][4]. Diverging Perspectives - The report has ignited a debate among analysts, with Rosenberg viewing the economy as hollow and reliant on unsustainable spending, while Gordon Johnson from GLJ Research perceives a concerning nominal boom [4]. - Johnson noted that nominal GDP growth exceeded 8%, with a GDP price index of 3.8%, which is significantly above the Federal Reserve's target, raising concerns about inflation and the Fed's current easing policies [5][6].

Deutsche Bank analysts raised concern on the crucial role of AI investments in the latest better-than-expected U.S. GDP data underscoring its significance in maintaining the country’s economic stability.AI Spending Anchors US Economic GrowthThe U.S. economy has been significantly bolstered by investments in AI-related sectors, according to a recent note from Deutsche Bank. The bank’s analysts, Adrian Cox and Stefan Abrudan, emphasized the pivotal role of tech-related spending in sustaining the country’s eco ...

Core Viewpoint - The U.S. GDP growth of 4.3% in Q3 is being challenged by economist David Rosenberg, who claims the real growth is only 0.8% due to underlying economic weaknesses masked by government spending and depleted savings [1][2][3]. Economic Analysis - The BEA reported a rise in real GDP from 3.8% in Q2 to 4.3% in Q3, primarily driven by consumer spending, exports, and government spending [2]. - Rosenberg argues that the GDP figures are misleading, suggesting manipulation similar to CPI data, and emphasizes that true economic growth is minimal when accounting for government spending and a significant drop in personal savings [2][3]. - The personal disposable income growth has remained flat, which Rosenberg identifies as a critical indicator contradicting the apparent consumption boom [3]. Diverging Perspectives - The report has ignited a debate among analysts, with Rosenberg viewing the economy as hollow and dependent on unsustainable spending, while Gordon Johnson from GLJ Research perceives a concerning nominal boom [4]. - Johnson points out that nominal GDP growth surged by 8.2%, with a GDP price index of 3.8%, indicating inflationary pressures that the Federal Reserve's easing cycle may exacerbate [5]. GDP Components - The BEA confirmed that a decrease in imports, which negatively impacts GDP, artificially inflated the headline growth figure [6]. - The price index for gross domestic purchases increased to 3.4% from 2.0% in the previous quarter, supporting Johnson's concerns about inflation [6]. Market Reactions - Investors face a dilemma in interpreting the GDP report, choosing between the headline strength, Rosenberg's "fugazi" weakness, or Johnson's inflationary concerns [7].

Economic Impact - Consumer spending during the Thanksgiving holiday increased by 7% this year, with the average spender spending $337 compared to $315 last year [2][3] - The GDP growth exceeded expectations, reported to be higher than 4%, indicating continued consumer spending [7] Tariff Discussion - Claims that President Trump's tariffs are causing price hikes lack evidence, with reports indicating that tariffs are not significantly impacting prices [8] - Senator Elizabeth Warren's assertions regarding tariffs and their effects on consumer prices are challenged, suggesting that the narrative around tariffs has been exaggerated by media and political opponents [8] Consumer Behavior - Starbucks is projected to sell $60 million worth of gift cards on Christmas Eve, with one in five Americans expected to receive a Starbucks gift card [10] - There is an expectation that consumer spending will continue to rise, particularly with tax refunds anticipated to start in January [13]

Joe, always good to see you. Thanks so much for joining me. >> Thank you.Very good to be with you, Jennifer. Happy holidays. >> Happy holidays to you.And what a way to kick off the holidays with such a stellar third quarter GDP number up 4.3% a full percentage point above expectations and driven by consumer spending up three and a half% though a large chunk of that from healthcare spending. Though we also saw trade really add to this number as well. Joe, can we see this level of growth sustained into next y ...

Headline though, GDP much stronger than expected, 4-3, highest read since Q3 of 2023. You know, Josh, I I wonder what this does to the thinking on rates. Torstston at Apollo says long-term interest rates will remain higher for longer.Investors should plan accordingly. Deutsche Bank today ratchet higher for yields is a significant story. I mean, we've been talking about and gaming out and planning for a rate cut in early 26.What if the Fed takes a hawkish tilt. I mean, do investors need to rethink this whole ...

Let's get the bond report. Rick Santelli has more on how the markets are reacting to all of these crossurrens. Rick, what can you tell us.>> Well, you know, I like the way the charts tell a picture. If you look at twos and tens when the number was released, a couple things should jump out at you. The twos definitely seem to be more aggressive in holding the upside.I don't think that's for any big reasons to explain the Fed or uh acknowledge percentages and probabilities. I think it's purely the next chart w ...

Let's get the bond report. Rick Santelli has more on how the markets are reacting to all of these crossurrens. Rick, what can you tell us.>> Well, you know, I like the way the charts tell a picture. If you look at twos and tens when the number was released, a couple things should jump out at you. The twos definitely seem to be more aggressive in holding the upside.I don't think that's for any big reasons to explain the Fed or uh acknowledge percentages and probabilities. I think it's purely the next chart w ...