U.S. economic data through September 30, 2025, indicate that growth remained steady in the third quarter, supported by consistent business investment and consumer demand. Stock markets reached record highs during this period, with further gains since then. Yields on U.S. Treasury notes and bills declined over the quarter, with both the 91-day bill and 10-year note yields nearing 4 percent.
Labor market conditions stabilized in July and August. Employment growth was modest, similar to the previous quarter. Forced deportation and voluntary self-deportation of illegal immigrants reduced labor supply, but labor demand also fell, keeping overall labor markets balanced. Firms continued to plan for output growth primarily through productivity improvements rather than increased hiring.
Private-sector forecasters surveyed by The Wall Street Journal on October 12 estimated third-quarter GDP growth at an annual rate of 2.7 percent, a significant upward revision from July’s median forecast of 1 percent. This change reflects strong private final domestic demand in recent monthly data.
Real personal consumption expenditures rose at a 2.8 percent annual rate in the first two months of the quarter compared to the second quarter. Business shipments of core goods (excluding defense and aircraft) grew at a 3.3 percent annualized rate during July and August. Reports suggest that research and development in artificial intelligence continues to drive business spending on intellectual property products.
A lapse in government funding has delayed several surveys and reports needed to estimate third-quarter GDP accurately; official figures will be released once normal operations resume.
In terms of employment data, total payroll job growth averaged 51,000 per month during July and August after averaging 55,000 per month in the second quarter. The slower pace is partly due to reductions in federal government jobs—down by an average of 12,500 each month—while private sector job creation held steady at about 58,000 jobs per month during this period. This lower rate is attributed to reduced population growth resulting from changes in immigration enforcement policy.
Unemployment rates fluctuated between 4 percent and 4.2 percent from May 2024 through July 2025 before rising slightly to an average of 4.29 percent for July and August; these figures remain just below the Congressional Budget Office’s non-cyclical unemployment estimate of 4.4 percent.
The labor force participation rate (LFPR) edged down slightly overall but increased among prime-age workers (ages 25–54), reaching an average of 83.6 percent for the third quarter.
Job openings averaged seven million per month in July and August—a decrease from earlier quarters—but maintained a ratio of one vacancy per unemployed worker during this time frame.
Inflation stayed above target levels during the third quarter: as of September, headline CPI inflation was measured at three percent over twelve months—a figure influenced by strong price pressures late last year into early this year—and core CPI inflation stood at three percent as well over that same period.
Energy prices contributed significantly to inflation trends; gasoline prices rose sharply between June and September while food prices also saw moderate increases both for groceries consumed at home and meals eaten away from home.
Differences between CPI- and PCE-based measures persisted: headline PCE inflation was recorded at approximately two-point-seven percent for the year ending August—about two-tenths lower than CPI inflation for that period—with core PCE inflation at two-point-nine percent compared with three-point-one percent via CPI measurement.
Looking ahead, economists see both upside potential and downside risks for economic performance over coming quarters but generally assess recession risk as relatively low; The Wall Street Journal’s quarterly survey placed median recession probability at thirty-three percent within twelve months—little changed from prior estimates.
The ongoing federal government shutdown—which extended past four weeks as of October thirty-first—is expected to weigh on fourth-quarter GDP through lost output from furloughed workers, delayed paychecks affecting consumption patterns among federal employees, and knock-on effects for related industries such as contractors or local service providers.
Other risks include possible headwinds from declining government employment if more federal workers separate under programs like Deferred Resignation unless offset by new hires elsewhere or postponed departures; private-sector labor dynamics are being closely monitored amid signs that both supply and demand have softened together without causing a spike in unemployment rates or layoffs so far.
Geopolitical uncertainty—including continued conflict involving Ukraine—remains a factor contributing volatility particularly within energy markets; higher fuel costs can feed into broader consumer prices including food production or transportation sectors like air travel.
Continued investments by firms into artificial intelligence could boost productivity across industries though timing remains uncertain; there may also be disruptive impacts if businesses or individuals lag behind technological adoption efforts relative to competitors or peers.
According to administration statements: “Thus far in President Trump’s second term, the Administration has successfully stewarded major fiscal legislation to prevent a historic tax increase, and it continues to seek further cuts to federal spending and incentivize productive business investment.” It adds: “Ongoing trade negotiations are transforming trade relationships, which will put American citizens first and prevent other countries from taking advantage of the openness of our economy.” The statement concludes: “Moreover, supply-side policies, deregulation, and other reforms will protect the American consumer from high inflation… while freeing up investment funds for more productive uses… In just a short six months, the Administration has made extensive progress to enact an agenda that will bring prosperity to all Americans.”
