BIG NUMBER | 3.9% | Consumer Power

U.S. households’ strong spending is keeping the economy chugging along

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Despite recent labor market weakness that has captured headlines, numerous signs point to continued economic strength as we enter the final months of 2025.

Case in point: GDPNow—the Federal Reserve Bank of Atlanta’s real-time Gross Domestic Product (GDP) growth tracker—is estimating that GDP in the third quarter grew 3.9%, based on currently available economic data. While that estimate likely will change as new data is released, it’s clearly off to a strong start.

Atlanta Fed GDPNow GDP Forecast

Atlanta Federal Reserve, calculations by Horizon. Data as of 09/26/2025.

Once again, consumers remain the driving force behind the still-robust economy. Most recently, we’ve seen:

U.S. consumer spending increased more than expected in August, boosted in part by strong spending on travel, hotels, and restaurants.
Second-quarter GDP growth was revised upward, from 3.3% to 3.8%—the fastest pace in nearly two years.
Retail sales in August rose more than expected, marking their third consecutive monthly increase.
Personal incomes also rose in August.

Certainly, there are concerning signs, such as a string of weaker-than-expected employment data. However, the latest evidence suggests that, as the fourth quarter begins, households are still spending at levels consistent with a healthy economy.

Originally published by Horizon Investments

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