US Q3 GDP Revised Up to 4.4%, Highest In Two Years

While it’s ancient history now – even preceding the record long government shutdown – and nobody will care, moments ago the BEA reported that its first revision of third quarter GDP came in a bit hotter than expected as US GDP grew slightly more than initially reported, supported by stronger exports. Due to the recent government shutdown, this updated report for the third quarter of 2025 replaces the release of the third estimate originally scheduled for December 19, 2025, the BEA reported.

Inflation-adjusted gross domestic product increased at a revised 4.4% annualized rate, the fastest in two years, and up 0.1% from the initial estimate, primarily reflecting upward revisions to exports and investment that were partly offset by a downward revision to consumer spending. That said, the change was minuscule: it went up from an unrounded 4.340% to 4.370%.

Compared to the second quarter, the acceleration in real GDP in the third quarter reflected upturns in investment, exports, and government spending, as well as an acceleration in consumer spending. Imports decreased less in the third quarter than in the second. 

Real GDP was revised up 0.1 percentage point from the initial estimate, primarily reflecting upward revisions to exports and investment that were partly offset by a downward revision to consumer spending. Imports were revised up. 

Here is the breakdown: 

• Personal consumption contributed 2.34% to the bottom line, slightly lower than the 2.39% originally reported.
• Fixed Investment added 0.15%, also revised lower from 0.19%
• Change in private inventories was a net improvement, raising from -0.22% to -0.12%, if still subtracting from the bottom line
• Net trade (exports less imports) was also revised favorably up from 1.59% to 1.62%
• Finally, government added 0.38% to the bottom line print, effectively the same as 0.39% before.

And visually:

Real gross output increased 3.2% in the third quarter, reflecting increases of 4.4% for private services-producing industries and 2.1% for government that were partly offset by a decrease of 0.1% for private goods-producing industries. Real gross domestic income (GDI) increased 2.4% in the third quarter, the same as previously estimated. The average of real GDP and real GDI increased 3.4%, the same as previously estimated.

From an industry perspective, the increase in real GDP in the third quarter reflected increases of 5.3 percent in real value added for private services-producing industries and 3.6 percent for private goods-producing industries that were partly offset by a decrease of 0.3 percent in real value added for government.  

Finally, while it’s beyond ancient history now, the price index for gross domestic purchases increased 3.4% in the third quarter, the same as previously estimated. The personal consumption expenditures (PCE) price index increased 2.8 percent, and the PCE price index excluding food and energy increased 2.9%, both the same as previously estimated. A much more timely print of core PCE for November will be reported at 10am today.