The Dow Jones (DJIA) opened Tuesday’s trading session lower, shrugging off a strong gross domestic product (GDP) update.
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U.S. GDP grew by 4.3% on an annualized basis during the third quarter, well above the consensus estimate of 3.3% growth and rising from 3.8% during the previous quarter. That marks the highest rate of growth since 2023 and signals a resilient economy in the face of a soft labor market and persistent inflation.
Inflation Rises Alongside GDP
Consumer spending, which is the largest contributor to GDP, accelerated to 3.5% from 2.5% during the quarter and was driven by recreational goods, vehicles, and healthcare. That came alongside a rise of 2.9% in core personal consumption expenditures (PCE), matching the estimate but rising from 2.6% quarter-over-quarter. Core PCE acts as a gauge of inflation and excludes volatile prices like food and energy.
“The TARIFFS are responsible for the GREAT USA Economic Numbers JUST ANNOUNCED…AND THEY WILL ONLY GET BETTER!” President Trump said in a Truth Social post.
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