Market Update: US economy grows at fastest pace in two years – Full Analysis

Michael Pearce, chief US economist at Oxford Economics, said the economy was well positioned as it headed into 2026, when it will start to feel the boost from tax cuts and the US central bank’s recent moves to drop interest rates.

“Underlying measures are consistent with a solid expansion,” he said.

In a post on social media, Trump celebrated the figures, saying his tariffs were responsible. He has been on the defensive amid souring consumer confidence and polls indicating dissatisfaction with his handling of the economy.

However, some analysts warned that rising prices faced by some households could make it difficult to sustain the unusually strong pace of growth seen in the most recent quarter.

Over the three months to September, the Fed’s preferred inflation gauge, the personal consumption expenditures price index, ticked up 2.8%, compared with 2.1% in the previous quarter, according to the report.

Analysts have warned that those price increases are weighing on lower and middle income households, even as higher income households continue to spend freely.

Oliver Allen, senior US economist at Pantheon Macroeconomics, noted that some more recent surveys and credit card data suggest that households are reining in their spending.

“The weak labour market, stagnant real incomes, and exhaustion of pandemic-era excess savings all seem finally to be catching up with households,” he said.