Third quarter 2025 GDP growth impressive despite tariff burden: CEI analysis

After a shutdown-related delay, the initial estimate for third quarter GDP is in – a strong 4.3 percent growth. That’s impressive in the midst of damage wrought by Trump tariffs, says Ryan Young, CEI Senior Economist:
“Although today’s release has some qualifiers, it remains good news.
“First, data collection is incomplete due to the shutdown. The third quarter ended on September 30, and the initial estimate was supposed to have come out on October 30. This advance estimate is typically revised twice over the following months on a set schedule. Today’s estimate combines the first two estimates and will be revised only once. Even when finalized, it will likely not be as complete as typical GDP estimates.
“Second, the rapid growth was driven mostly by consumer spending. While this is a sign of confidence, people’s continued ability to spend depends on the labor market staying strong. It could also add to debt problems if people are spending beyond their means.
“Finally, the fact that GDP grew as fast as it did despite a shrinking manufacturing sector is impressive, though the Trump administration is unlikely to turn to this as a talking point. Likely due to tariffs, manufacturing has now shrunk for nine months in a row.”