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U.S. Economy Grows at Fastest Pace in Two Years, Despite Presidential Overstatements
The U.S. economy expanded at its fastest pace in two years during the second and third quarters of 2025, although economic experts refute President Donald Trump’s characterization of these figures as “numbers unheard of” or growth rates the country “never had before.”
According to the Bureau of Economic Analysis (BEA), after declining by an annualized rate of 0.6% in the first quarter of 2025, real gross domestic product grew at an annualized rate of 3.8% in the second quarter and 4.4% in the third quarter. While impressive, these numbers fall short of the 4.7% growth recorded in the third quarter of 2023 during the Biden administration.
For historical context, the record for quarterly growth remains 34.9% in the third quarter of 2020, which occurred after the economy contracted by 28% at the start of the COVID-19 pandemic. The pre-pandemic record stands at 16.7% from the first quarter of 1950, according to BEA quarterly data dating back to 1947.
The president has repeatedly cited a fourth-quarter growth projection of 5.4%, attributing this figure to the Federal Reserve Bank of Atlanta. However, that projection has since been revised downward—first to 4.2% on January 29, and then to 3.7% as of February 10. The BEA is scheduled to release its official estimate for the fourth quarter on February 20.
Economic experts also challenged Trump’s characterization that the Biden administration suffered from “stagflation” while his policies created “the exact opposite.” Stagflation, which economists define as a sustained period of high inflation combined with weak economic growth and rising unemployment, did not accurately describe the economic conditions under Biden, according to Kyle Handley, professor of economics at the University of California, San Diego.
“Real GDP growth during the Biden presidency was positive and often above trend, and unemployment remained historically low,” Handley noted. “Real GDP grew strongly in 2021 during the post-pandemic recovery, slowed in 2022 as monetary policy tightened, and then re-accelerated in 2023 and 2024. That is not a period of economic stagnation.”
The Federal Reserve Bank of Cleveland has stated that the last major case of stagflation occurred in the mid-1970s, when oil price shocks triggered inflation above 12 percent alongside unemployment that peaked at 9 percent—a combination they described as “rare” and “unusual.”
When Biden left office, the annual inflation rate had cooled to 3%, down from its peak of 9.1% in June 2022. The unemployment rate decreased under Biden from 6.4% at his inauguration to 4% in his final month, with an average monthly rate of 4.1% throughout his presidency—below the historical average.
“What we’re really seeing is a continuation of trends that were already well underway before Trump took office in January 2025,” said Aeimit Lakdawala, associate professor of economics at Wake Forest University. He noted that inflation had already significantly cooled before Trump’s second term began, “driven largely by the resolution of supply chain issues and Fed monetary policy.”
Trump has specifically credited his tariff policies for the economic growth, writing in a Wall Street Journal opinion piece that “properly applied, tariffs do not hurt growth—they promote growth and greatness.” However, economic experts strongly disagree with this assessment.
“Crediting tariffs for economic growth gets the causation backwards,” Lakdawala explained. “The economics on this is fairly clear and there is broad consensus among economists: tariffs are essentially a tax on imports that raises costs for domestic consumers and businesses. If anything, they’ve been a modest drag on growth, not a driver of it.”
An analysis by Yale University’s Budget Lab estimated that tariffs actually slowed real GDP growth by 0.5 percentage points and increased the unemployment rate by 0.3 percentage points in 2025. The Tax Foundation similarly projected that Trump’s tariffs would reduce U.S. GDP by 0.5 percent from 2026-2035.
Economists attribute the recent growth primarily to consumer spending and business investment. Joseph Brusuelas, chief economist at RSM, noted that third-quarter growth in 2025 was driven by “household consumption” and “AI-related investment,” which together “accounted for just under 70% of total growth during the quarter.”
The BEA itself cited increases in consumer spending, exports, government spending, and investment as key factors in the third-quarter growth.
As the economy continues to evolve, economists will closely monitor whether the current growth trajectory is sustainable, particularly as consumer debt levels rise and the full impact of tariff policies becomes clearer.
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5 Comments
The economy’s performance is certainly better than the initial contraction, but I’m skeptical of Trump’s claims of ‘never before seen’ growth. The data shows there have been higher quarterly growth rates, even if they were short-lived. A balanced perspective is needed here.
I agree, the president’s characterization seems hyperbolic. While the growth is welcome, it’s important to put the numbers in proper historical context.
It’s good to see the economy rebounding, though the president’s rhetoric about ‘unheard of’ growth rates doesn’t align with the facts. The Q3 figure of 4.4% is strong but not unprecedented. I’ll be curious to see how the final Q4 estimate holds up.
It’s good to see continued economic growth, though the president’s claims of ‘numbers unheard of’ seem exaggerated. A 4.4% growth rate in Q3 is impressive, but not unprecedented. I’m curious to see how the final Q4 numbers pan out.
You’re right, the growth rates are strong but not record-breaking. I wonder how much of this is due to post-pandemic recovery versus underlying economic factors.