The BEA combined the first and second estimates into a single release.
GDP blasted higher in the delayed Third Quarter BEA GDP Release.
Real gross domestic product (GDP) increased at an annual rate of 4.3 percent in the third quarter of 2025 (July, August, and September), according to the initial estimate released by the U.S. Bureau of Economic Analysis. In the second quarter, real GDP increased 3.8 percent.
Due to the recent government shutdown, this initial report for the third quarter of 2025 replaces the release of the advance estimate originally scheduled for October 30 and the second estimate originally scheduled for November 26.
Key GDP Numbers
- Real GDP: 4.3 percent
- Real Final Sales: 4.6 percent
- Real Final Private Domestic Sales: 3.0 percent
- Real Final Domestic Sales: 2.9 percent
- Real GDI: 2.4 percent
Percentage Point Contributions to GDP
2025 Q3 GDP Percentage Point Contributions
- PCE Services: 1.74 PP
- PCE Goods: 0.66 PP
- Government: 0.39 PP
- Residential Investment: -0.21 PP
- Nonresidential Investment: 0.40 PP
- Change in Private Inventories: -0.22 PP
- Exports: 0.92 PP
- Imports: 0.67 PP
Understanding Imports
Imports do not add or subtract from GDP. The key word is “domestic”.
However, the BEA assumes all sales are domestic . So, the BEA then needs to subtract out imports.
Since imports declined in the third quarter, the BEA’s calculation shows a positive contribution.
Later today, I will post charts of how much AI contributed to third-quarter GDP.
As measured by GDP, the economy is humming. As measured by many other things, it’s not.
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Finally, please note Current Economic Conditions Sentiment Index Falls to a 50-Year Record Low
Pocketbook issues continue to dominate consumer views of the economy.
If you don’t understand why, please click on some of the preceding links.
It’s really hard to make any sense of the Q3 data on growth and jobs. GDP growth was expanding at a blistering pace with little or no contribution from overall investment but again (after Q2) a massive contribution from net exports, while the unemployment rate was increasing. The net result is an unusually large Okun‘s law error residual that has no explanation.
U.S. Bonds are vulnerable. The means-of-payment money supply just soared in November. M2 didn’t change much. But there was an unusual seasonal shift from TDs (time deposits) to DDs (demand deposits). Changes my forward look.
No surprise that nominal GDP rose to 8.2 percent. R-gDp rose by 4.3 percent in the 3rd qtr. GDP deflator @ 3.7%.
And yet in another report, I see that consumer confidence has dropped to the lowest levels since last April when tariffs were first rolled out.
Gee, if only we had retail sales numbers … LOL
More FED rate cuts needed!
Zero Hedge was attributing “soaring health insurance spending” for the jump.
AI is causing a conundrum to economists everywhere. Productivity is rising while incomes are stagnant or even declining. Any cut to interest rates is going to cause more inflation. In a perfect world economists would want more productivity with no added inflation. The current economic climate is reminiscent of the late 1990s economy where the hiring boom had tapered and jobs were being cut but productivity was still rising due to technological investments bearing fruit.
Why were the statements from Homeland Security excluded from the report? It is this one-sided reporting that Bari Weiss complained about. Incomplete reporting is not journalism; it is propaganda, and CBS wants it to stop.
This is a Trump economy. Cooking the books is part of it.
Ideologues on both sides always say the books are cooked when the numbers don’t please them. As a retired journalist (from when that was a fairly honorable calling) who covered the unemployment releases in one job and wrote stories about Fed productivity stats and BLS inflation data in another job, I dismiss that crap.
There are genuine measurement challenges, including conceptual ones, and some series are more reliable than others. I think that the establishment employment survey is unreliable, and so is the so-called “birth death” model. But I think the household unemployment survey is reliable, and so are the inflation data.
“Reliable” does NOT mean perfect or precise, but rather it means consistent and “in the ballpark.” As long as the errors are consistent and relatively small, the data are comparable over time, which matters the most. Productivity and inflation measurements are harder in a service-dominated economy because of conceptual issues in measuring quality changes.
But “cooking the books?” Nope. Doesn’t happen. The nutcases will often discover the alternative unemployment measurements and declare the U-3 headline rate a fraud, which is bullshit. And every presidential administration will cherry pick, a good example being the spring of ’24 when Senile Joe Biden tried to blame inflation on the grocery stores.
BOTTOM LINE: You are dead-ass wrong about “cooking the books.” You are learning that from the CIA broadcasts to the steel plate in your skull, and when you puke that crap out you only reveal your craziness.
Health care is a heavily-weighted component of PCE Services.
Who could have known that having 50% of the adult population being diabetic or pre-diabetic would be “good for the economy”?
The 2009 movie “The Informant!” was a documentary disguised as a comedy.
Diabetes is an epigenetic disease. Humans express the disease/condition after years of chronic dietary abuse and insufficient exercise.
We are fed by a food industry that pays no attention to health and treated by a health industry that pays no attention to food.
pax dumbfuckistan only rich country that feeds poison and calls it food. we are an empire of nihilist grifters. the 4 part series, century of the self, will explain how it happened. so will the book, omininous parallels.
My guess is they are not discounting the “growth” enough with inflation. So a big part of that high number is actually inflation. Bond markets are calling BS on it as well. I mean 4.3% Real GDP along with 3% counted inflation or 2.8 if PCE or whatever, and 10 year yields should be close to 7%, or in other words right around nominal GDP. But it isnt. 10 year yield “spiked” on the data from around 4.16% to a touch over 4.2% and now back to around 4.175% yield. That number is UNDER the reported Real GDP number, never mind inflation. It is thus around 300 basis points under nominal GDP. That is a HUGE difference. Dont have time or I might go od a FRED chart charting delta between 10 year yield and nominal GDP which I would guess is now showing a jaws of death type pattern
The rebuild of the economy after Biden’s destructive 4 years is not an easy task and is replete with dislocations. This is like takiing a picture of a moving train & proclaiming it is not moving.
Einstein’s theory 3 trains example.
Strange days ain’t it? Most of the people I know that aren’t rich are struggling but the people I know that are rich are complaining about $32/lb for beef tenderloin at Costco.
If the GDP measure is accurate, the Fed shouldn’t be cutting rates otherwise we’ll get massive inflation instead of just bad inflation.
If the GDP measure is made-up then we’re all in deep trouble.
No one is making it up. They might get it wrong from time to time, and have to revise, but it’s not invented.