The Atlanta Fed’s GDPNow model now estimates real GDP growth of 3.4% in the third quarter of 2025, up from 3.1% just six days earlier. If the estimate holds, it would mark the highest rate of growth since the third quarter of 2023.
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The higher growth comes after August’s retail sales grew by 0.6% month-over-month, beating the expectation of 0.2%. Excluding volatile items, like autos and gas, retail sales jumped by 0.7%, also beating the expectation of 0.4%.
Resilient Consumers Boost GDP as Net Exports Contribution Slides
In addition, the model now expects third-quarter real personal consumption expenditures growth of 2.7%, up from its prior estimate of 2.3%. That indicates a resilient consumer, even as August’s Consumer Price Index (CPI) showed a month-over-month jump of 0.4%, the highest rate of growth since January.
Finally, the contribution of net exports to GDP fell to 0.08 percentage points from 0.23 percentage points following data from the Bureau of Labor Statistics released this morning.
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