US GDP

What is GDP, in plain English?

Think of Gross Domestic Product (GDP) as the economy’s report card. It measures the total value of all final goods and services a country produces over a period of time.

A simple way to see it is as a spending pie:

GDP = Consumer Spending + Investment + Government Spending + Exports − Imports

Because prices change, economists often use “real GDP", which adjusts for inflation so we can tell if the economy is truly producing more, not just charging higher prices.

The US economy in Q3 2025

In Q3 2025 (July–September), real US GDP grew at a 4.3% annual rate, up from 3.8% in Q2. The release was delayed and combined because of the government shutdown, but the message is clear: growth stayed strong.

What drove it?

• Consumers spent more, still the main engine of growth.
• Exports rose and imports fell, so trade added to GDP.
• Government spending increased, supporting activity.
• Investment remained weak, but the decline was smaller than in Q2.

A “core demand” measure—real final sales to private domestic purchasers (US consumer spending + private investment)—rose 3.0%, almost the same as Q2’s 2.9%. Underneath the headline, private demand is growing at a steady pace.

Prices and profits

Growth is solid, but inflation hasn’t fully cooled:

• The gross domestic purchases price index rose 3.4% in Q3 (vs 2.0% in Q2).
• The PCE price index rose 2.8%, and core PCE 2.9%.

So inflation is well off its peaks but still above the Fed’s 2% goal. Meanwhile:

• Real GDI grew 2.4%.
• The average of GDP and GDI rose 3.4%.
• Corporate profits jumped by about $166 billion, a big improvement on Q2.

Put together, you have strong growth, firm inflation, and rising profits—an economy far from recession, and a Fed that can’t relax too quickly.

How Canada’s GDP compares

Canada’s recent GDP shows a milder recovery with a different mix. Real GDP has returned to modest growth, but:

• The rebound is driven mainly by trade (stronger exports, weaker imports) and government investment.
• Domestic demand—Canadian consumers and businesses at home—has been much softer than the headline suggests.

So while the US is showing broad strength led by consumers, Canada is more about avoiding recession via trade and public spending, with households still feeling the strain of higher rates and living costs.

Why this matters

GDP is really just a way of asking: “How much is the economy producing, and what’s driving it?”

• In the US, Q3 2025 shows strong growth fueled by consumers, trade, and government, with inflation still above target and profits rising.
• In Canada, growth has picked up, but the foundation is weaker household demand and heavier reliance on trade and government.

For investors, workers, and businesses, these reports help you see where the momentum is and how sustainable it might be—even if GDP can’t answer every question about the economy.