Third-Quarter GDP Grew at an Annual 4.3% Rate, But With a Catch
It’s the highest growth in two years.
It sounds fantastic, but the real news is in the details.
The Bureau of Economic Analysis (BEA) released its third-quarter real gross domestic product report.
So-called experts predicted 3.3%.
The GDP grew at an annual rate of 4.3% in the third quarter, which covers July, August, and September.
Wow.
US Q3 GDP:
+4.3% vs 3.3% exp.Recession from Q1 canceled. Strong growth. pic.twitter.com/bFnK30FM8e
— Geiger Capital (@Geiger_Capital) December 23, 2025
“The increase in real GDP in the third quarter reflected increases in consumer spending, exports, and government spending that were partly offset by a decrease in investment,” according to the BEA. “Imports, which are a subtraction in the calculation of GDP, decreased.”
I don’t like the fact that there was a decrease in investments.
Here’s how it happened:
- Personal Consumption rose by a whopping 2.39%, up from 1.68% in Q2
- Fixed Investment moderated, rising by 0.19%, vs 0.77% in Q2. Once again, this is mostly data centers
- Change in private inventories declined by 0.22%, a moderation from the -3.44% drop in Q2, and to be expected as the trade aberration from the trade war moderate
- Net trade (exports less imports) also normalized and after a surge of 4.83%, the increase was a more modest 1.59%, driven by positive contributions from both exports (0.67%) and imports (0.92%).
- Finally, government contributed 0.39% to Q3 GDP after subtracting from US growth in each of the previous two quarters of 2024.
People’s spending “grew at an annual rate of 3.5% in the third quarter, picking up from 2.5% in the previous quarter.”
Great! People are spending money. That’s good, right? How about disposable income?
Well, let’s look at what people are buying.
Health care blew out every other category, increasing 0.76%.
About that surge in personal consumption: it's all health insurance pic.twitter.com/YKzXApbN0x
— zerohedge (@zerohedge) December 23, 2025
The two most striking (and confusing) numbers in the GDP report: personal consumption +3.5% in q3, real disposable income 0%. That divergence can't continue.
— Greg Ip (@greg_ip) December 23, 2025
At least people didn’t pay much more on housing, utilities, gas, and other energy services.
Again, you have to get past the headlines and look at the details.
Those details show the real story.
Donations tax deductible
to the full extent allowed by law.
Comments
Even with the important caveats this is impressive. There is no doubt in my mind whatsoever that under a fourth Obama (Harris would be fetching Barack coffee – you didn’t think they’d allow her to do any more than that did you?) you could just a minus sign in front of that 4%.
If Trump can keep things moving in this direction for eight or nine more months – and root out sufficient fraud from the system – he may gain seats in Congress instead of the traditional loss.
It’s going to take just about that much time for the actual prosperity to trickle down to Joe Sixpack’s food and energy bills.
Be noticed prices holding steady instead of rising.
*I’ve noticed…
It’s happening already with lower gas prices, which underpins pretty much every other cost reduction in the system!!
not necessarily, Diesel prices are still relatively high and that’s what used to transport goods for manufacturing and distribution
The 2026 Election is about how people feel the economy is headed. That was true on 6 Nov 24, today and will be on 1 NOV 26.
Not for me. Inflation could be rampant or we would be in a major depression and I still won’t vote for a democrat. They are pustules on the butt of the US.
Brings to mind a line from the movie Topkapi. “A carbuncle on the behind of society.”
Good numbers. Won’t always be perfect and people seem to be going back to the go away in May model. That will be verified or refuted depending on investment in Q1 2026
Regardless of an R or D adminstration, this GDP number (as with all economic numbers published by government) will be revised down in the coming weeks.
But in the meantime, this stellar GDP number will be like crack coco-aine for wall street.
Very true. We should also keep in mind that govt spending is reflected in adding to GDP so any spending reductions also lower GDP. I’ve always thought the better, more honest reflection of economic strength would be to subtract govt spending from GDP not add it b/c gov’t doesn’t ‘produce’, instead it redistribute funds taken from the private sector.
“Health care blew out every other category, increasing 0.76%.”
If a Dem administration would count “health care,” there’s no reason why it shouldn’t be included in the current administration’s numbers. So long as apples are compared to apples, the numbers remain relative and subject to reasonable comparison. (It’s asking too much, I imagine, to ask for “absolute” numbers in any event.)
speaking of,…Trump did a deal with the drug companies to only charge in the US what they charge overseas, consequently, my prescriptions, which used have have copays of $15-$25 now have a zero copay
I wonder how much healthcare is driven by GLP-1 (weight loss) and how much is driven by ahhh, therapy to get over 2024 the election
Gold Dec 23, 2025 18:22 4,493.10
Let’s see what the income tax refunds show. If it’s as big as the admin is saying it will only help consumer confidence.
I’m going to say we’ll see grocery prices drop as gas and diesel goes down.
Food price at grocery have a bunch of inputs but yeah fuel is a big one. The impact of removing the unqualified Alien truck drivers is likely to raise transportation costs. How much is the question, I’ve seen 200K of these drivers tossed around as an estimate. I have no clue the actual # but I suspect it’s big. Then there’s the same employment potential impact for the processing plants. The one raid in Nebraska gutted the illegal Alien workforce, they had to replace something more than 2/3. Within a week they had plenty of new US Citizen employees and were back up and running but wages/benefits were increased substantially to hire them.
So removing illegal aliens from the system, who are no doubt paying zero percent tax, opens up opportunities for Americans and when you have to pay them legally you put money in their pockets AND contribute to legal taxation. Seems a winner for everyone.
Indeed it is … from the standpoint of
1. less illegal Aliens
2. less drain on public resources by the deported illegal Aliens
3. increase in wages to US Citizen workforce
4. Increased hiring of US Citizens
5. More available housing for US Citizens since the illegal Alien population is deported
There are some ‘downsides’ that will be trumpeted by d/prog and ideological legacy media goons.
1. Reduced rental income as housing supply increases.
2. More existing homes and apartments available for purchase…which lowers the prices of those assets.
3. Increased costs for labor across the board which will eventually show up in retail prices. Particularly in industries which have relied on illegal Alien workforce up till now.
I suspect the d/prog and ideological legacy media will create a ‘narrative’ about the economic impact of mass deportation framing it as causing; increased grocery prices, lower property tax revenue (‘harming’ schools/local govt), falling real estate asset prices (‘harming’ retirees who wanted to sell but now price too low and/or hurting Mom/Pop real estate investors with a few rental properties) …they won’t be wrong exactly but they would be lying by omission and warping, withholding full context/info to serve their partisan agenda.
I’m not defending Luigi, but you guy have no idea how evil those health insurance companies are.
Don’t call what they are doing capitalism. It’s not. When the cost of something is driven by “how much can you pay?” you have long since gone past the dystopian void.
Care by most standards is worse than ever.
The cost of having coverage is the worst as its ever been.
Center/right populism has a good deal of overlap with center/left populism, more than many want to admit. IMO, the biggest economic common ground is the shared disdain for ‘crony capitalism’, the lack of serious and sustained anti monopoly enforcement and the decades long decline in real wages.
Also- Trump economy is rocking. I bet butt puckering amounts on this. I’m still long in options purchased before the election and during the tariff war. This is Leaps out to 2027 (both jan and dec… some june).
I think at this point the growth is assumed into pricing and buying opportunities with 500-700% returns will be rare like they should be. For the record- I’m at 150-300% on the majority of those bets I’m still bucking for 1000% on one I bought on the darkest day of the tariff war. At that point I was already way over my planned risk threshold but found 2k in the couch cushions (a dividend payment) for one more go. I had an inclination Trump would figure it out, but I when I say butt puckering… I mean it because there’s so many forces rooting for him to lose and he’s fighting fights the 99 other men would lose.
Above average returns are still to be found by buying deep in the money at lower risk but I suspect even dumb money is figuring out that there’s a winner in the White House right now and just going long on the major indices is the smartest bet going forward. Even if the AI bubble pops, this economy can hold it’s own. Thanks mostly to Trump.
I remain optimistic for the next 4 years. I do not believe we can expect the same level of genius from the next President. Even if it is one of our favorites. Politics just doesn’t breed winners like Trump. We are looking at a once or twice in century phenomena.
I sincerely hope we never see a buying opportunity like that again. It usually follows terrible times. I made a similar bet in the ides of March of 2020. The time before that was 2008-2009 (before I had money but knew what was happening- I got out and in), the time before that was 2001. 2001 taught me to never doubt America’s ability to wage a come back. The shit thing is… America should never be put in a position of having to come back.
I didn’t mean to imply I invested after 9/11. I meant it was a buying opportunity like the others.
Thank the unaffordable care act.
Leave a Comment