2025 Gross Domestic Product
Joe Long, Econometric Analyst
January 2026
Gross Domestic Product (GDP)
Gross domestic product (GDP), the featured measure of U.S. output, is the market value of the goods and services produced by labor and property located in the United States. It is the broadest measure of economic activity and is often used to gauge the health of the economy. GDP is reported quarterly by the Bureau of Economic Analysis (BEA) and is available in both nominal and real terms (adjusted for inflation).
America’s GDP rose at a 4.4% annual pace in the third quarter.
The Commerce Department reported Thursday, up from 3.8% in the April-June quarter and from the 4.3% growth the department initially estimated. The economy hasn’t grown faster since third-quarter 2023.
One-year view: GDP growth has accelerated sharply in 2025
Early indicators are pointing to even hotter Q4 momentum (GDPNow at ~5.4%), the U.S. economy is demonstrating real strength and stability
Key GPD components and their approximate contributions to the 4.4% growth :
Personal Consumption Expenditures (C) — The largest component, typically around 68% of GDP. Consumer spending rose at about 3.5% annualized, contributing roughly 2.3–2.4 percentage points to growth. This was led by services (e.g., healthcare, recreation, and other services) and goods (e.g., recreational items and nondurables like prescription drugs and food).
Gross Private Domestic Investment (I) — Includes business equipment, structures, intellectual property, and residential construction. It turned positive in the updated estimate, adding a small net contribution (around 0.1–0.4 percentage points overall), with strength in equipment and intellectual property offsetting some weakness in residential and nonresidential structures.
Government Consumption Expenditures and Gross Investment (G) — Federal, state, and local spending. It increased (around 2.2% annualized), contributing about 0.4 percentage points to growth, driven by both defense and non-defense outlays.
Net Exports (X - M) — Exports minus imports.A major positive driver, adding around 1.5–1.6 percentage points. Exports surged (up ~9–9.6% annualized, especially in goods like capital equipment and services), while imports fell (~4–5% annualized), boosting the net figure.
These contributions sum to the headline 4.4% growth. Consumer spending remains the economy’s backbone, but trade improvements and rebounds in other areas fueled the acceleration from Q2’s 3.8%.