The economy expanded at a faster pace than previously estimated in the third quarter of last year, the Department of Commerce said Thursday.
Gross domestic product, the government’s broad measure of economic performance, rose at a 4.4 percent annual pace, beating analyst estimates. The earlier estimate had the economy growing at a 4.3 percent pace in the August through September period.
This is the strongest pace of growth in two years.
The rapid pace of growth in the second and third quarters of the year defied expectations that policy uncertainty, tariffs, and the government shutdown in October would be a drag on the economy. Instead, consumer spending and business investment have buoyed the economy despite a slowdown in government spending and the government collecting hundreds of billions of dollars in tariff revenue.
Consumer spending rose at a 3.5 percent annual pace.
The numbers are adjusted for inflation. Before adjustment, the economy grew at an 8.3 percent annual pace.
Real final sales to domestic purchasers, an alternate measure of economic growth, expanded at a 2.9 percent pace, down a tick from the previous estimate of three percent.
Corporate profits before taxes rose at a 4.5 percent annual pace.
The biggest contributor to GDP in the third quarter was information technology, reflecting the boom in AI related investment and production. This was followed by finance and insurance, professional and scientific services, and durable goods manufacturing—each of which added more than half a percentage point to GDP.
The federal government subtracted from GDP, reflecting the Trump administration’s program of shifting away from state-driven growth toward the private sector as well as the government shutdown.
This revision was delayed by the government shutdown.
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