The US economy expanded in the third quarter at the fastest pace in two years, bolstered by resilient consumer and business spending and calmer trade policies.

Inflation-adjusted gross domestic product, which measures the value of goods and services produced in the US, increased at a 4.3% annualized pace, a Bureau of Economic Analysis report showed Tuesday. That followed 3.8% growth in the prior period that was also bolstered by households.

The BEA was originally due to publish an advance estimate of GDP on Oct. 30 but the report was canceled due to the government shutdown. The agency typically releases three estimates of quarterly growth — fine-tuning its projections as more data comes in — but it will only release two for the period leading up to the longest shutdown on record.

The delayed report card shows the economy maintained momentum through the middle of the year as consumers powered ahead and the most punitive of President Donald Trump's tariffs were rolled back. While the shutdown is expected to weigh on fourth-quarter growth, economists expect a modest rebound in 2026 when households receive tax refunds and an anticipated Supreme Court ruling may strike down Trump's sweeping global tariffs.

The Federal Reserve's latest projections echo that sentiment, with Chair Jerome Powell citing supportive fiscal policy, spending on AI data centers and continued household consumption as reasons for the central bank's forecast for faster growth next year. Policymakers are projecting just one interest-rate cut in 2026 after three straight reductions to end this year.

Part of the reason for some officials' hesitation to lower borrowing costs much more is because inflation remains above their 2% target. The report showed the Fed's preferred inflation metric — the personal consumption expenditures price index, excluding food and energy — rose 2.9% in the third quarter. The BEA has yet to reschedule the October or November monthly PCE data.

Source : Bloomberg