US economy unexpectedly surges 4.3% in third quarter — its strongest growth in two years

The US economy grew at an unexpectedly strong pace of 4.3% in the third quarter — the highest rate in two years — according to a government report released Tuesday.

Vigorous consumer spending on services such as health care and products like recreational vehicles fueled the surge in the gross domestic product, which is comprised of the value of all goods and services produced across the economy, for the July through September quarter.

The inflation-adjusted annual rate of 4.3% marked an uptick from 3.8% growth the previous quarter and beat analyst expectations of 3.2% growth, according to economists polled by The Wall Street Journal.

President Trump took a victory lap in the wake of the report, crediting his tariff policy for the strong growth.

“The TARIFFS are responsible for the GREAT USA Economic Numbers JUST ANNOUNCED…AND THEY WILL ONLY GET BETTER! Also, NO INFLATION & GREAT NATIONAL SECURITY. Pray for the U.S. Supreme Court!!!” he wrote on Truth Social.

The new report from the Commerce Department was delayed by the recent federal government shutdown.

The figures mark the first official government estimate of third-quarter-economic growth, though they are being reported as the fourth quarter draws to a close.

Despite the positive results, other indicators in recent months have called the underlying strength of the economy into question.

The jobs market has struggled, with unemployment rising in November to 4.6% — the highest level in more than four years.

Retail sales have also slowed even as upper-income households continue to spend, causing some big businesses such as Home Depot to report weaker-than-expected earnings and outlooks.

Inflation has been a hot-button issue as it hovers above the Federal Reserve’s 2% target.

Complicating matters, the latest report for November showed that consumer prices rose a smaller-than-expected 2.7% from a year ago.

Economists were cautious about the figure, noting that it was distorted by data-collection challenges during the record 43-day government shutdown that ended in November.

Businesses have been unsure of how much in tariff costs to pass along to consumers, adding to the difficulty of assessing the full impact of President Donald Trump’s tariff policies on prices. 

The latest GDP figures put the average annual rate of economic growth at 2.5% since Trump returned to office in January.

That’s on par with the 2.4% average pace recorded last year, when former President Joe Biden was still in office.