U.S. Economic Growth Blows Past Expectations, Accelerates In Third Quarter

WASHINGTON, Dec 23 (Reuters) – The U.S. economy grew faster than expected in the third quarter, driven by robust consumer spending.

Gross domestic product increased at a 4.3% annualized rate last quarter, the Commerce Department’s Bureau of Economic Analysis said in its initial estimate of third-quarter GDP on Tuesday. The economy grew at a 3.8% pace in the second quarter. Economists polled by Reuters had forecast GDP would rise at a 3.3% pace.

Trump credited his wide-ranging tariffs for the third-quarter economic boom.

“The TARIFFS are responsible for the GREAT USA Economic Numbers JUST ANNOUNCED,” Trump said. “AND THEY WILL ONLY GET BETTER! Also, NO INFLATION & GREAT NATIONAL SECURITY. Pray for the U.S. Supreme Court!!!”

The data was delayed by the 43-day government shutdown and is now outdated. Consumer spending increased at a 3.5% rate last quarter after advancing at a 2.5% pace in the second quarter.

White House Press Secretary Karoline Leavitt said Tuesday’s economic report shows that “doubters, naysayers, panicans, and liberal media have been proven wrong — again.”

“Trust in Trump. The President’s pro-growth policies are working, and the best is yet to come!” she added.

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Much of the consumer spending acceleration resulted from a rush to buy electric vehicles before the September 30 expiration of tax credits. Motor vehicle sales dropped in October and November, while spending elsewhere was mixed.

The nonpartisan Congressional Budget Office has estimated the shutdown could slice between 1.0 percentage point and 2.0 percentage points off GDP in the fourth quarter. It projected most of the GDP drop would be recovered, but estimated between $7 billion and $14 billion would not.

Surveys suggest consumer spending is being driven by higher-income households, thanks to a stock market boom that has inflated household wealth.

(Reporting by Lucia Mutikani; Editing by Paul Simao and Chizu Nomiyama)