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America’s economy is booming

The American economy has been on a tear. After a rocky patch last year, when Donald Trump’s tariffs and immigration shutdown weighed on growth, it looks strong again. In the third quarter of 2025, GDP grew by 4.3% on an annualised basis—well above the impressive 2.5-3% clocked up between 2022 and 2024. Fourth-quarter figures, due on Friday, are expected to be only slightly lower, at 2.3%, despite the government shutdown in October and November.

The Trump administration is forecasting even faster growth this year. The One Big Beautiful Bill Act, a tax-cutting law enacted in July, will soon hand Americans $191bn in refunds. Mr Trump is still crusading for interest-rate cuts—which might rev up the economy further. The White House’s preferred model, from the Federal Reserve Bank of Atlanta, at one point predicted 5.4% annualised growth for the fourth quarter. That has since been trimmed to 3%—though distortions by tariffs and the shutdown are probably inflating the figure.

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