US Economy Revs up – 4.4% Growth in Q3, Fastest Pace in Two Years

Bureau of Economic Analysis, the Wall Street Journal, AP, Bloomberg, Reuters, and Market Watch contributed to this report.

The US economy grew faster than officials first thought in the third quarter of 2025, powering ahead at an annualized 4.4% pace – the strongest quarterly gain since mid-2023 – according to the Commerce Department’s updated GDP report. The revision nudged growth up 0.1 percentage point from the earlier estimate and left analysts nodding: consumers are still spending.

What moved the needle? The BEA said the Q3 uptick reflected gains across the board – consumer spending, exports, government outlays and investment – with consumer purchases alone climbing at a brisk clip. Consumer outlays, which make up roughly two-thirds of the economy, grew sharply in the quarter and helped offset other drags.

A few data points to watch: the personal consumption expenditures (PCE) price index – the Fed’s preferred inflation gauge — rose 2.8% in Q3, while the core PCE (excluding food and energy) increased 2.9%, the BEA said. Corporate profits also got a bump: profits from current production were revised up, adding to the upbeat picture.

News outlets and economists said the revision underlines a surprisingly resilient economy heading into year-end. Reuters noted that the faster pace was driven by stronger exports and business investment as well as consumer demand, and flagged the “K-shaped” nature of the recovery – with higher-income households and big companies doing much of the heavy lifting.

How markets and policymakers might react is the immediate question. On the one hand, healthy growth gives investors and businesses confidence; on the other, it complicates the Federal Reserve’s calculus on interest rates. The steady PCE reading could give the Fed less room to loosen policy without stoking inflation, while sturdy growth could keep bond yields and equity watchers on alert. Bloomberg and other outlets flagged the data as a sign the economy is still running hot in places.

A bit of nuance: the BEA’s technical notes show the revision to GDP came mainly from updated export and investment figures; consumer spending was revised slightly down versus the first estimate but still rose strongly overall. In short – strong consumer activity, plus better trade and investment numbers, produced a pleasantly surprising bump to growth.

What’s next? The BEA will publish the advance estimate for fourth-quarter GDP on Feb. 20, 2026. Until then, economists will be parsing this updated snapshot for clues about inflation trends, employment strength and whether the hot pockets of the economy can spread more broadly. For now, the headline is clear: the US kept growing – and consumers kept paying.