US economy defies expectations with a surge in third quarter — a big win for Trump?
The Trump administration has been facing flak for its handling of the economy, and it has also affected his ratings. But things have turned out to be a lot better than expected, according to quarterly numbers. The government recently released a report on Tuesday, which showed that the US economy grew by 4.3% in the third quarter, defying predictions of several eminent economists. For Republicans, this will be seen as a big win in a year when their administrative policies have come under heavy criticism.
The report was supposed to be released at the end of October, but the government shutdown at the time forced its delay. Economists polled by Dow Jones expected a 3.2% growth, and this was more than a whole percentage point higher than that. A CNBC report states that the country’s GDP got a boost from higher consumer spending, an increase in exports, and a rise in government spending.
Consumer spending reportedly went up by 3.5% in the third quarter after rising 2.5% in the second quarter. A measure of growth called real final sales to private domestic purchasers also rose by 3% in the quarter. The personal consumption expenditures price index went up by 2.8% in the third quarter, and by 2.9% when it came to non-food and energy spending. The chain-weighted price index also went up by 3.8% during this time.
These numbers are important as they have all outperformed the expectations of people. Despite these numbers, the market did not see much of an uptick as the data was negative-looking. Stock futures were negative while Treasury yields held higher. The federal report also showed a massive rise in corporate profits in the quarter.
Although this is good news, experts believe that Americans will have to brace for 2026. Economist Komal Sri-Kumar, President of Sri-Kumar Global Strategies, believes that the country will go into a recession in the year that will be unlike anything it has faced in the last 50 years. Stagflation levels will reach levels that have not been seen since the 1970s.
“We haven’t seen that since the 1970s. The reason we are repeating today is that stagflation requires a conscious mismanagement of policy for it to come into being. And all of the makings of stagflation are there today in a 2026 outlook….So, everybody’s going to get hit,” Sri-Kumar said.
He does, however, believe that some assets will be safe even in such a situation, and urged citizens to invest in them. These assets are precious metals like gold and silver, and real estate. “Some of your portfolio should be in alternative assets, perhaps real estate, or distressed debt. When there is blood on the street, you go and put some money into it,” he added.
More on Market Realist:
Trump admin announces 'big plan' for Americans who feel it is expensive to buy a home now
New survey reveals the whopping amount Americans plan to spend for their fitness in 2026
Major US stores are quietly changing their return rules this holiday season — key things to know
