Federal Reserve expected to keep interest rates unchanged at next week’s meeting despite robust growth.
America’s economy grew a bit faster during the third quarter than government officials first calculated, boosted by better export sales and smaller cuts to business stockpiles, new figures released Thursday showed.
The nation’s gross domestic product, after accounting for price changes, went up at a yearly pace of 4.4%, the Bureau of Economic Analysis reported. That marks the quickest growth rate in two years.
The numbers revealed some of the best two-quarter performances the country has seen since 2021, a period when the economy was still bouncing back from pandemic shutdowns. Businesses cut down on bringing in foreign goods after rushing early in the year to stock up before President Donald Trump put his wide-ranging tariffs in place. Meanwhile, people kept buying things, and companies kept spending money despite unpredictable trade rules.
US real GDP growth data (Quarterly Percent Change)
2024:
* Q2 2024: +3.5%
* Q3 2024: +3.2%
* Q4 2024: +1.8%
2025:
* Q1 2025: -0.6% (contraction)
* Q2 2025: +3.8%
* Q3 2025: +4.4% (revised estimate)
With the economy growing this fast, jobs staying relatively stable, and prices still running higher than what the Federal Reserve wants, central bank officials are expected to hold off on changing interest rates when they meet next week.
Other government numbers released Thursday showed that people filing first-time unemployment claims stayed near historically low levels.
The GDP figures included the Fed’s go-to measure for tracking inflation, the personal consumption expenditures price index without food and energy costs, which stayed at 2.9% for the quarter. The Bureau of Economic Analysis planned to put out October and November price information, along with details on what people earned and spent, later Thursday morning.
People buying things, which drives most economic activity, went up at a 3.5% yearly rate during the quarter. Americans spent money on services at the fastest clip in three years, and also picked up the pace on buying physical goods compared to earlier months.
Companies put money into their operations at a 3.2% rate, mostly because they kept buying computer gear. Money going into data centers, the buildings that hold computers running artificial intelligence systems, hit an all-time high.
Since changes in trade and business inventories have made overall GDP numbers harder to read lately, people who study the economy are watching a different measure more closely, final sales to private domestic purchasers, which looks at what consumers and businesses are actually buying. That went up 2.9%, matching the previous quarter.
Job market shows continued strength
New unemployment benefit requests barely budged last week, holding steady at low points after jumping around during the holidays. First-time claims went up by just 1,000 to reach 200,000 for the week that ended Jan. 17, the Labor Department said Thursday. Economists had predicted 209,000.
Claims have only dropped to 200,000 or below a handful of times over the past three years, mostly during holiday weeks. These kinds of numbers point to a job market where companies aren’t laying off many workers.
The Federal Reserve cut rates three times in a row to help the job market, but officials are widely expected to leave rates alone at their first meeting of the year next week.
The four-week average of new claims, which evens out the ups and downs, dropped to 201,500 last week, the lowest in two years. Before seasonal adjustments, claims also fell last week, with New York, Georgia and Texas posting some of the biggest drops.
The number of people collecting ongoing benefits, which shows how many are receiving unemployment money, fell to 1.85 million the week before, the lowest since November. However, workers are taking home the smallest slice of GDP since 1947, despite the strong economic performance as reported by Cryptopolitan earlier.
Nasdaq CEO highlights US market strength
Global businesses keep their eyes on American markets because of the profits they’re making here, Nasdaq’s top executive Adena Friedman said. “The investment firms are obligated to find the best returns.”
Friedman said on Wednesday from Davos, Switzerland. Foreign investors put $3 trillion more into US stocks over the past year, she noted. “We just have to continue to drive those outsized returns within our economy to continue the flows coming in.”
Friedman said US markets offer the most depth and trading activity for companies wanting to sell stock to the public, especially technology firms.
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