NYT: “U.S. Economic Growth Surged in Third Quarter of 2025”

It seems that my skepticism about tariffs was misplaced.

The U.S. economy grew at a vigorous pace through the end of September, despite the uncertainty created by tariffs and widespread concerns about affordability among households. Economic growth rose at a 4.3 percent annual rate in the third quarter, the Commerce Department reported Tuesday, an acceleration from the previous quarter.

The third-quarter reading showed that, even in the face of negative consumer sentiment and a softening job market, the roughly $30 trillion economy started October on relatively solid footing as a whole, outperforming the bearish expectations of some experts only months before.

“It shows an economy that is mostly solid, actually still firing on most cylinders if not all cylinders, though I still think we have a lot of noise in the quarter to quarter data,” said Michael Pearce, chief U.S. economist at Oxford Economics. “Most of the strength is coming from wealthier households.”

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the economy has remained far more resilient than many economists had expected, particularly given President Trump’s sweeping tariffs. Although tariffs have undoubtedly raised the costs of some goods, consumers have continued to spend. Consumption, which constitutes roughly 70 percent of the economic pie in a typical year, rose at a 3.5 percent annualized pace in the quarter.

“Even as consumption takes the reins back from investment, the economy maintains considerable momentum,” said Paul Ashworth, chief North America economist at Capital Economics.