The US economy expanded at a far stronger pace than anticipated over the summer, according to official figures released on Tuesday. However, this robust growth was immediately tempered by a significant and sustained decline in consumer confidence, painting a complex picture of the nation's economic health.
Strong GDP Growth Defies Expectations
The Commerce Department announced that gross domestic product (GDP) rose at an annualised rate of 4.3% during the third quarter. This figure, which measures the total value of goods and services produced, far exceeded forecasts and marks the fastest growth rate in two years.
Officials attributed the surprising surge to notable increases in several key areas. Consumer spending, exports, and government spending were all cited as primary drivers behind the economic acceleration.
Consumer Sentiment in Prolonged Decline
Offsetting the positive GDP data was a continued downturn in how Americans feel about the economy. The Conference Board's closely monitored gauge of consumer sentiment fell in December, representing the fifth consecutive monthly decline.
This marks the longest streak of falling confidence since the global financial crisis of 2008. The persistent drop suggests that, despite strong macroeconomic numbers, everyday economic anxieties are mounting among the public.
Political Reactions and Policy Complications
Former President Donald Trump swiftly claimed credit for the growth figures, linking them directly to his trade policy. On his Truth Social platform, he wrote, "The TARIFFS are responsible for the GREAT USA Economic Numbers JUST ANNOUNCED…AND THEY WILL ONLY GET BETTER!" He also referenced the Supreme Court, which is currently weighing legal challenges to those import levies.
This robust growth further complicates the Federal Reserve's monetary policy decisions. The Fed, which announced its third interest rate cut of the year earlier in December amid signs of a softening jobs market, now faces a divided path on how to proceed with interest rates.
The conflicting data—strong GDP versus weak consumer confidence and a mixed jobs market—creates a significant challenge for policymakers aiming to balance inflation control with economic support.
Other notable developments from Tuesday included:
- The release of new documents related to the late financier Jeffrey Epstein, which contained references to Donald Trump. A senior US attorney claimed in the files that Trump was on a flight in the 1990s with Epstein and a 20-year-old woman. The documents note there is no indication the woman was a victim of a crime.
- The US Supreme Court blocked an attempt by the Trump administration to deploy National Guard troops to the Chicago area, reining in the use of the military for domestic purposes.
- The Department of Veterans Affairs was banned from providing abortions to veterans, including in cases of rape or incest, following a Justice Department memo.
