The U.S. third quarter growth not only surpassed the second quarter's 3.8% but also far exceeded market expectations of 3.3%. Following the data release, Treasury yields rose sharply while stock indices opened slightly lower. Tech stocks broadly declined. Market expectations now project the Federal Reserve will cut interest rates twice in 2026 (down from three previous projections). This is a fascinating phenomenon! Ordinary people I've spoken with universally feel this year's economic conditions are poor, with employment and daily life proving challenging. Yet economic data, stock markets, and various asset performances all appear unrealistically strong. The devil is in the details. Data indicates that increased consumption by high income households was the primary driver of GDP growth (with substantially higher investment income being a key factor), while low and middle income families face hardships due to tariffs, employment pressures, and rising prices. Large corporations' massive investments in sectors like AI have boosted economic growth, yet small and medium sized enterprises continue to struggle. The Congressional Budget Office projects that the government shutdown will reduce fourth quarter GDP. I'd like to hear what opportunities everyone has identified and is sharing. Given the current situation, should we hold stocks through the holidays or lock in profits? Should we start planning ahead for next year?
GDP surged unexpectedly by 4.3%, marking the fastest growth in two years.
byu/ElectricalWar6844 instocks
Posted by ElectricalWar6844
39 Comments
Sus.
The disconnect is wild. My restaurant is dead compared to last year but somehow the economy is supposedly booming. Rich folks spending their investment gains while everyone else struggles to pay rent.
Impossible. Redditors with a negative net worth told me anything even remotely good is impossible so long as the orange guy is in charge
The only logical reason for this is fake/conspiracy
Isn’t GDP growth a good thing? Sorry for my incompetence
Hold unless you want to pay taxes and if they are short term gains you pay big taxes.
cue the “it’s fake” comments, despite every independent data point pointing to strong GDP growth
Then I guess we don’t need more rate cuts.
“The devil is in the details…”
This is not an outlier. High income families have always been responsible for the overwhelming majority of discretionary spending. There’s no indication that will ever change and is likely to become more pronounced in the future.
GDP = How much are wealthy spending
suuuuuuuuuuure it did.
Broadly declined? Confusion of green and red?
It is so strange that the underlying data seems to be mostly what people think is going on but then the headline data is out of whack. Not saying, just saying.
Two things. Do I fully trust this data? No due to how Trump has removed people who made him look bad with data and stats.
Second, it truly amuses me how the market hates possible good economic news because they are so addicted to cheap money. An actual good economy means growth all around in the past which should mean a good market. Now a good market means cheap money into AI bullshit that may not be financially stable. Reminds me of past bubbles where they speculate crazy growth that wasn’t sustainable from railroads in the 1890s to tech around 2000.
While PCE accelerates from 2.5% to 3.5%, real disposable income decelerated from 1.8% to 0.0%. This may indicate thst “consumer strength” is actually just stretching their wallets.
The era of AI driven jobless economic growth is here.
Suuuuure
Is this number the one adjusted for inflation properly ?
I run a large mid 8 figure food distribution company … my purchases and sales are up because prices are up but profits are the same margins .
Totally believable…
Great numbers.
Most of Reddit would be mad if you gave them a gold brick saying “It’s too heavy”
We’re in the “golden age”.
Unfortunately, GDP has become conflated with consumer spending or consumer sentiment, which is only part of the equation. Remember the equation from economics class: GDP = C + I + G + (X – M), where C = consumer, I = business investment, G = government spending, and X-M is exports – imports. The most important factor this time around is I, or business investment, from the technology companies for AI deployment. This is what is driving the GDP surge. Government spending slowed during this time period due to the government shutdown, but we should see a bit of an uptick in this area for fourth quarter with the reopening of the government.
100% because of inflation
K shaped economy continues. Companies are cutting jobs and trying to replace them with AI, while raising prices.
K shaped growth.
And is tarrif working?
Honestly, I don’t know these people are. We have significantly cut our restaurant spend and saving cash
Reading carefully into this: Spending by BIG corporations now outweighs the spending of regular people by so much the data does not reflect living conditions for regular people. The GDP metric is useless for describing the economic wellbeing of average Americans.
Does anyone trust the data?
Increased government spending and increased consumer spending due yo inflation. Neither is the win it’s being made out to be.
And this is why the stock market and GDP are not accurate reflections of what life is like for ordinary americans.
Regardless, you can’t fully trust *any* economic data emerging from this administration.
cue all the redditor expert economists coming out of the woodworks to tell us that this is actually terrible news and we are due for the 15th predicted recession this year
They cooked the numbers
It’s the same story for the entire year. Higher income folks are doing well and spending.
Middle and lower class folks are struggling with increasing costs. Cost of living keeps increasing. Consumer confidence is low. The job market is sluggish.
The government is spending and investing a lot of money propping up certain industries which have done well this year.
It’s truly an economy of have and have nots. You have economic growth with little job creation and increasing costs.
Is this another product of how imports and exports are calculated? Where imports are way down because of tariffs, so it looks like we are “exporting” more than before?
Trump bad
GDP growth in 1999 was running 4.2 to 4.8 percent. We all know what happened in 2000.
Hope numbers are not manufactured by BEA since every Fed Agency has been filled with Trump sycophants. 😁
We now just live in a K shaped economy and doubt that changes anytime soon
Redditors are wrong again, yet they will double down and say it’s fake. It takes time to unwind what Biden did to this country.
Technically, the economy is growing, today’s 4.3% number was significantly inflated by the decrease in international trade (lower imports) and a spike in exports.
Lol the market is still pricing in 2 rate cuts 😂 when the fed literally said 1