U.S. economic growth has been strong, although the labor market has softened and inflation remains elevated. The positive expansion in Q3 2025 GDP by 4.4% was driven by positive contributions in consumption, net exports and government spending. Relatively high interest rates and high real estate prices continue to hold back the housing sector. However, falling interest rates are likely to bolster sales and prices in 2026 and 2027. Personal spending was up in Q3 2025 by 5.4% year on year, which is a solid pace. This pace of consumer demand is likely to support growth, even if labor market data remain mixed and payrolls slow further.

In case you missed our Q3 update, you can check it out here.