U.S. Revises Up Third-Quarter GDP Growth to 4.4% While Core PCE Remains Under Control

• GDP growth surprised to the upside, with third-quarter expansion revised up to 4.4%, marking the strongest pace in two years and reinforcing U.S. economic resilience
• Inflation remained contained, as core PCE held steady at 2.9%, easing concerns that stronger growth is reigniting price pressures
• Growth was broad-based, driven by consumer spending, business investment—especially in technology and AI—and a rebound in corporate profits

The U.S. economy expanded at a robust 4.4% annualized pace in the third quarter of 2025, according to an updated estimate released Thursday, marking the strongest quarterly growth in two years and reinforcing the economy's resilience despite ongoing inflation and trade headwinds.

Gross domestic product was revised up from the prior 4.3% estimate, beating expectations and extending a streak that puts the U.S. on track for a fifth consecutive year of above-average growth. Compared with the previous quarter's 3.8% expansion, the latest figure represents a notable acceleration, underscoring stronger-than-anticipated momentum through the summer months.

Growth was supported by broad-based gains, including solid consumer spending, rising exports, increased government outlays, and stronger business investment. Spending on equipment and software remained particularly firm, reflecting continued appetite for technology and artificial intelligence-related investments. Corporate profits also rebounded sharply after two weak quarters, with adjusted pre-tax earnings jumping 4.5% from July through September.

While some of the headline growth was inflated by consumers and businesses pulling forward imports ahead of higher U.S. tariffs, underlying demand remained resilient even after adjusting for this front-running effect. Economists broadly expect growth to remain above trend in 2025, well above the economy's estimated long-term speed limit of around 1.8%.

On the inflation front, price pressures remained contained. The personal consumption expenditures (PCE) price index rose 2.8% year over year in the third quarter, while core PCE inflation, which excludes food and energy, held steady at 2.9%. Both readings were unchanged from the prior estimate, suggesting inflation is not re-accelerating alongside stronger growth.

Looking ahead, the final piece of the 2025 growth picture—the fourth-quarter GDP report—will be released next month. Early indicators point to continued expansion, though the record 43-day government shutdown in October and November could weigh on the final outcome.