US Economy Shows Highest Growth in Two Years

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The report showed that despite a slowdown in the labor market and inflation concerns, consumer spending increased by 3.5% year-on-year compared to 2.5% in the previous quarter.

Throughout 2025, the United States economy experienced significant pressure due to the radical changes in trade and migration policies introduced by Donald Trump, as well as cuts in budget spending.

And although this led to sharp fluctuations in some sectors, such as import and export, overall, the economy, contrary to forecasts, maintained a stable dynamic.

The announced indicators turned out to be significantly higher than expected, with most analysts predicting an annual growth rate of around 3.2%.

According to analysts, the growth in consumer spending in the third quarter of the year was driven by an increase in healthcare expenditures.

Imports, which reduce the overall growth figure, continued to decline due to tariffs on US supplies introduced by President Trump.

While exports, which had previously fallen sharply, recovered, increasing by 7.4%. Government spending also grew, thanks to defense expenditures.

These successes helped overcome the decline in investments, including in intellectual property, as well as problems in the housing market. It continues to suffer from high interest rates, which have exacerbated housing affordability issues and supply shortages.

According to Michael Pearce, chief US economist at Oxford Economics, the country's economy is well-positioned for 2026 as it begins to feel the effects of tax cuts and recent measures by the US central bank to lower interest rates.

"Core indicators point to stable growth," he said.

However, analysts warned that rising prices faced by some families could make it difficult to sustain the unusually high growth rates observed in the last quarter.

Between July and September, the key inflation indicator for the Federal Reserve — the Personal Consumption Expenditures (PCE) price index — rose by 2.8% compared to 2.1% in the previous quarter, the report noted.

Experts warn that rising prices are putting pressure on low- and middle-income families, while higher-income families continue to spend without restraint.

According to Oliver Allen, senior economist at Pantheon Macroeconomics, recent survey results and credit card data indicate that American families are cutting back on their spending.

"A weak labor market, stagnant real incomes, and the depletion of savings accumulated during the pandemic seem to be finally taking a toll on household budgets," the expert noted.

Other recent data suggest a weakening labor market, which has already prompted the Federal Reserve to cut interest rates three times in a row.

Meanwhile, as reported by AFP, the boom in artificial intelligence investments from OpenAI, Google, and other tech giants continued to gain momentum, keeping the American stock market near record highs.

An S&P Global Ratings forecast on December 18 stated that AI investments are likely to support the economy, but their effect could be offset by the political unpredictability of the Trump presidency.

"Statutory US tariff rates in 2026 may not change significantly, but uncertainty regarding laws, norms, investment rules, military actions, and geopolitics in general will remain high," S&P warns. "This uncertainty will likely curb investment and consumer spending."

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