The United States economy demonstrated stronger-than-expected performance in the third quarter of 2025, with real gross domestic product (GDP) expanding at an annualized rate of 4.4 percent. This figure represents a slight upward revision from the previous estimate of 4.3 percent, as confirmed by the final reading released on Thursday, January 22, 2026, by the US Bureau of Economic Analysis (BEA).
Key Drivers of Economic Growth
This growth in the third quarter of 2025 marks a notable acceleration from the 3.8 percent expansion recorded in the second quarter of the same year. The BEA attributed the 0.1 percentage point revision primarily to stronger-than-anticipated exports and fixed investment, which effectively offset a minor downward adjustment in consumer spending. Overall, the quarter's robust performance was fueled by significant increases in personal consumption, government spending, and exports, highlighting a diversified economic momentum.
Inflation Metrics Remain Steady
Inflation data remained stable in the final report, providing a mixed picture for policymakers. The personal consumption expenditures (PCE) price index rose 2.8 percent during the quarter, while the core PCE index, which excludes volatile food and energy prices, increased 2.9 percent. Both of these figures were unchanged from previous estimates, indicating persistent inflationary pressures.
Moreover, additional data issued by the BEA on Thursday revealed that the US PCE price index posted year-on-year growth of 2.7 percent in October and 2.8 percent in November 2025. Similarly, the core PCE index for October and November 2025 grew 2.7 percent and 2.8 percent year on year, respectively. These numbers underscore that inflation has not shown signs of easing, maintaining a steady pace that could influence future economic decisions.
Market Reactions and Economic Disparities
Following the release of the GDP data, major U.S. stocks opened higher, reflecting investor optimism about the economic outlook. Concurrently, gold prices retreated from session highs, suggesting a shift in market sentiment towards riskier assets. However, despite these positive headline numbers, which signify a significant recovery from the economic contraction experienced earlier in 2025, analysts have raised concerns about a growing disconnect between GDP growth and the labor market.
Expert Insights on the Jobless Boom
Heather Long, chief economist at Navy Federal Credit Union, provided a critical perspective on the current economic landscape. She described the situation as a "jobless boom," where strong growth is primarily powered by artificial intelligence investments and consumption by wealthier families, yet there is almost no corresponding hiring. Long emphasized that this dynamic leaves middle-class families feeling uneasy, as they have yet to experience the economic uplift promised by the robust GDP figures.
This analysis points to an uneven distribution of economic benefits, with the growth driven by sectors that may not translate into widespread job creation or income gains for average households. As the US economy continues to navigate post-pandemic recovery and technological shifts, these disparities highlight the need for targeted policies to ensure inclusive prosperity.
