The BEA revised its estimate of GDP from 4.3 percent to 4.4 percent in 2025 Q3.
 

Real GDP, Quarter-Over-Quarter
 

The BEA reports Gross Domestic Product, 3rd Quarter 2025 (Updated Estimate), GDP by Industry, and Corporate Profits (Revised).

Real gross domestic product (GDP) increased at an annual rate of 4.4 percent in the third quarter of 2025 (July, August, and September), according to the updated estimate released by the U.S. Bureau of Economic Analysis. In the second quarter, real GDP increased 3.8 percent.

Due to the recent government shutdown, this updated report for the third quarter of 2025 replaces the release of the third estimate originally scheduled for December 19, 2025.

Real GDP was revised up 0.1 percentage point from the initial estimate, primarily reflecting upward revisions to exports and investment that were partly offset by a downward revision to consumer spending. Imports were revised up. 

Compared to the second quarter, the acceleration in real GDP in the third quarter reflected upturns in investment, exports, and government spending, as well as an acceleration in consumer spending. Imports decreased less in the third quarter than in the second.

Real final sales to private domestic purchasers, the sum of consumer spending and gross private fixed investment, increased 2.9 percent in the third quarter, revised down 0.1 percentage point from the previous estimate.

From an industry perspective, the increase in real GDP in the third quarter reflected increases of 5.3 percent in real value added for private services-producing industries and 3.6 percent for private goods-producing industries that were partly offset by a decrease of 0.3 percent in real value added for government.

Quarter-Over-Quarter GDP

• Real GDP: 4.4 percent
• Real Final Sales: 4.5 percent
• Real Final Domestic Sales: 2.8 percent
• Real Final Private Domestic Sales: 2.9 percent
• Real Gross Domestic Income GDI: 2.4 percent

The difference between GDP and Real Final Sales is inventory adjustment which nets to zero over time.

The Fed closely watches Real Final Private Domestic Sales which is 1.5 percentage points lower than headline GDP.

Gross Domestic Income (GDI) was 2.4 percent. GDP and GDI are two measures of the same thing.

Income from sales should match value of products sold. This has been an ongoing discrepancy.

Percentage Point Contributions to GDP
 

Real GDP contributions, Quarter-Over-Quarter
 

Percentage Point Contributions to GDP Detail

• PCE Services: 1.7 PP
• PCE Goods: 0.6 PP
• Government: 0.4 PP
• Residential Investment: -0.3 PP
• Nonresidential Investment: 0.4 PP
• CIPI: -0.1 PP
• Exports: 1.0 PP
• Imports 0.6 PP

PCE stands for Personal Consumption Expenditures.

CIPI stands for Change in Private Inventory. This is the difference between GDP and Real Final Sales in the lead chart.

Imports neither add nor subtract from GDP by definition (D meaning domestic). However, the BEA assumes all sales are domestic so it adjusts by the dollar amount of imports.

I wish the BEA would point this out, but Imports do not subtract from GDP. They have no impact at all.

That said, the extremely wild gyrations of imports in 2025 Q1 and Q2 have mostly calmed down.

Contributions to GDP by Industry Group 2025 Q3
 

GDP Contribution by Industry Group
 

Upcoming Improvements to the GDP News Release

BEA’s ongoing modernization and streamlining of news release packages will include improvements to the GDP news release beginning with the advance estimate for the fourth quarter of 2025 on February 20, 2026. The news release text will be modified to include links to BEA’s online Interactive Data Tables. News release tables in PDF or Excel format will no longer be provided beginning with the third estimate on April 9, 2026. This change will reduce duplication, increase efficiency, and point users directly to the most complete data.

As I read it, the BEA will stop producing charts. Since I generally produce my own charts (the preceding chart is an exception), that improvement does not impact me.

I will have many charts of how AI impacted GDP coming out shortly.

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January 22, 2026: Real Spending Has Exceeded Real Income for Seven Straight Months

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