Key Points
- The U.S. economy grew at a 4.4% annual rate in the third quarter, the fastest in two years.
- The growth was driven by strong consumer spending, particularly from wealthier households.
- The job market remains weak, with employers adding only 28,000 jobs a month since March.
- This “jobless boom” is a sign of a “K-shaped economy,” with a growing divide between the rich and the poor.
The U.S. economy grew at its fastest pace in two years during the third quarter, fueled by strong consumer spending. The nation’s gross domestic product (GDP) rose at a 4.4% annual rate, a solid performance that underscores the economy’s resilience amid President Trump’s aggressive trade policies.
Consumer spending, which is the main engine of the U.S. economy, grew at a healthy 3.5% clip. People were spending on both goods and services, with a notable increase in healthcare spending. A surge in exports and a drop in imports also helped to boost the headline growth number.
However, this “jobless boom” isn’t being felt by everyone. While the overall economy is strong, the job market is looking a lot weaker. Employers have been adding a lackluster 28,000 jobs a month since March, a far cry from the hiring boom we saw in the years after the pandemic.
This gap between the strong economic data and the reality for many families is a classic example of a “K-shaped economy.” Wealthier Americans are doing great, with their incomes boosted by a rising stock market and investments in the booming AI sector. But lower-income households are still struggling with high prices and stagnant wages.
“The United States is experiencing a jobless boom where strong growth is powered by AI investments and consumption by wealthier families, but there is almost no hiring,” said one chief economist. “It’s an uneasy situation for many middle-class families.”
The big question for 2026 is whether the benefits of this economic boom will start to trickle down to the middle class. For now, it seems that not all are sharing the good times.
