Context
Despite tariffs and trade restrictions, the U.S. economy grew at its fastest pace in two years in the July–September quarter.
Why did U.S. GDP grow?
1. People spent more
• Consumer spending rose strongly (biggest factor).
• Spending on services like healthcare increased.
2. Imports fell, exports rose
• Tariffs reduced imports.
• Exports rebounded.
• Falling imports boosted GDP mathematically.
3. Higher government spending
• Defence spending increased, adding to growth.
4. Tariff impact delayed
• Full negative effects of tariffs have not yet hit prices and demand.
5. Policy support
• Tax cuts and expected interest-rate cuts supported demand.
