US Economy Records Strongest Growth in Two Years as Spending and Exports Surge

The United States economy expanded at its fastest pace in two years during the three months to September, driven by a sharp rise in consumer spending and a rebound in exports, according to newly released official data. The figures point to resilient underlying momentum despite a challenging policy and economic environment.

Data showed that the world’s largest economy grew at an annualised rate of 4.3 percent in the third quarter, up from 3.8 percent in the previous three month period. The result exceeded most expectations and marked the strongest quarterly performance since 2023, offering reassurance to policymakers and investors who had been watching for signs of slowdown.

The report was released later than usual after delays caused by a US government shutdown, but economists said it still provided a clear snapshot of economic conditions during late summer. It highlighted how household demand continues to play a central role in supporting growth, even as inflation pressures and higher borrowing costs weigh on some sectors.

Consumer spending rose strongly during the quarter, reflecting steady employment levels and rising wages in parts of the economy. Spending on services remained particularly robust, while purchases of goods also picked up after a softer start earlier in the year. Analysts noted that American households have shown a willingness to keep spending despite uncertainty over prices and interest rates.

Exports also contributed to the stronger performance, benefiting from improved global demand and a more competitive trade environment in certain industries. While imports fluctuated sharply, partly due to shifts in supply chains and trade policies, the overall trade balance improved compared with earlier quarters.

The growth figures come against a backdrop of significant policy changes. The US economy has been navigating adjustments to trade rules, immigration policies, and government spending priorities. At the same time, persistent inflation has forced the Federal Reserve to maintain tight monetary conditions, raising concerns earlier in the year that growth could falter.

Despite these pressures, the data suggests the economy has remained more resilient than many forecasts predicted. Economists said the headline growth number masks sharp swings beneath the surface, particularly in trade related components, but the broader picture points to steady domestic demand and business activity.

Government spending was more subdued during the quarter, reflecting fiscal tightening measures and budget constraints. However, private sector activity largely offset this drag, reinforcing the view that the economy is not solely reliant on public spending to sustain expansion.

Some analysts cautioned that the pace of growth may moderate in coming months as the impact of higher interest rates continues to filter through to housing, investment, and credit conditions. Others pointed out that strong third quarter growth gives the economy a buffer heading into the final months of the year.

For policymakers, the report presents a mixed picture. Strong growth eases fears of an imminent slowdown but also complicates efforts to bring inflation fully under control. Officials will likely weigh the data carefully as they assess future policy decisions.

Overall, the latest figures underline the durability of the US economy in a period of global uncertainty. While challenges remain, the combination of consumer strength and improving export performance has helped deliver the fastest growth seen in two years, reinforcing confidence that the economy continues to outperform expectations.