US economy grows at fastest pace in 2 years in third quarter

• Third quarter GDP growth of 4.4% significantly beat expectations of 3.3%, representing the strongest quarterly expansion in two years
• The economy grew at a 2.5% annualized rate through the first three quarters of 2025, rebounding from a 0.6% contraction in Q1
• Second quarter GDP was revised to show 3.8% annualized growth, indicating sustained economic momentum in mid-2025

Summary

The U.S. economy expanded at an annualized rate of 4.4% in the third quarter, according to the Bureau of Economic Analysis (BEA) final reading released Thursday. This marks the fastest growth pace in two years and significantly exceeded economist expectations of 3.3% growth, per LSEG polling.

Key Economic Data:

• Q3 GDP growth: 4.4% (annualized)
• Q2 GDP growth: 3.8% (annualized, revised)
• Q1 GDP: -0.6% contraction
• Combined annualized growth rate through first three quarters of 2025: 2.5%

Market Implications:

The stronger-than-expected GDP growth demonstrates robust economic resilience despite earlier concerns about a potential slowdown. The significant beat versus consensus estimates (4.4% vs. 3.3% expected) suggests the economy maintained strong momentum through the summer months.

The two-year high in growth rates indicates a notable acceleration from previous quarters, with the economy recovering from the first quarter's contraction. The 2.5% annualized rate through the first nine months shows solid overall economic performance for 2025.

This robust growth could influence Federal Reserve policy decisions regarding interest rates, potentially supporting a more hawkish stance if inflation concerns persist alongside strong economic activity. The data may boost investor confidence in equity markets while impacting bond yields and dollar strength.

Note: The article appears to reference 2025 dates, which may be a reporting error as this would be future data. Investors should verify the actual reporting period with official sources.