GDP Growth

The U.S. economy has shown impressive strength in recent reports, and that's good news for everyone.

 

Gross Domestic Product (GDP) measures the total value of goods and services produced in the country. It's a key sign of economic health—stronger growth often means more jobs, higher wages, and better opportunities for businesses and families.

 

On January 22, 2026, the U.S. Bureau of Economic Analysis released its updated estimate for the third quarter of 2025 (July–September). Real GDP grew at an annual rate of 4.4%, up slightly from the earlier estimate of 4.3%. This was the fastest pace in two years and stronger than the 3.8% growth seen in the second quarter. The main drivers included solid consumer spending, higher exports, increased government spending, and business investment, with imports pulling less in the opposite direction.

 

Looking forward, early signs for the fourth quarter of 2025 are even more positive. The Atlanta Federal Reserve's GDPNow model, which tracks incoming data, estimates growth at 5.4% as of January 21, 2026.

 

For the full year of 2026, forecasts remain encouraging. Goldman Sachs projects U.S. GDP growth around 2.5% to 2.8%, above many economists' expectations. Other analysts, such as those at Wells Fargo and Bank of America, see solid figures in the 2.3%–2.4% range. These outlooks point to benefits from lower interest rates, tax policies, and continued investment in areas like technology.

 

Why does this matter to everyday people? Healthy GDP growth supports a stable job market, helps keep recession risks low (now estimated at 20% or less by some experts), and creates room for wages and living standards to rise. It shows the economy is resilient and moving in a positive direction.

 

This news is very good considering all the concerns surrounding tariffs, foreign policy, and government layoffs. One of the underlying drivers of this is likely the One Big Beautiful Bill and the tax cuts and permanent extension to existing tax rates for most Americans.

 

The optimism we are seeing will likely be a driver in the stock market in the coming months and quarters. However, if this optimism declines or turns south, then the market will be the first sign of economic concerns.