BIG NUMBER | 3.9% | Consumer Power

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

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

For more news, information, and strategy, visit the ETF Strategist Content Hub.

---

This commentary is written by Horizon’s asset management team. Past performance is not indicative of future results. Nothing contained herein should be construed as an offer to sell or the solicitation of an offer to buy any security. This report does not attempt to examine all the facts and circumstances that may be relevant to any company, industry, or security mentioned herein. We are not soliciting any action based on this document. It is for the general information of clients of Horizon Investments, LLC (“Horizon”). This document does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual clients. Before acting on any analysis, advice, or recommendation in this document, clients should consider whether the security in question is suitable for their particular circumstances and, if necessary, seek professional advice. Investors may realize losses on any investments. Asset allocation cannot eliminate the risk of fluctuating prices and uncertain returns. All investing involves the risk of loss.

The investments recommended by Horizon are not guaranteed. There can be economic times when all investments are unfavorable and depreciate in value. Clients may lose money. This commentary is based on public information that we consider reliable, but we do not represent that it is accurate or complete, and it should not be relied on as such. The opinions expressed herein are our opinions as of the date of this document. These opinions may not be reflected in all of our strategies. We do not intend to and will not endeavor to update the information discussed in this document. No part of this document may be (i) copied, photocopied, or duplicated in any form by any means or (ii) redistributed without Horizon’s prior written consent. Forward-looking statements cannot be guaranteed. Other disclosure information is available at www.horizoninvestments.com.

Horizon Investments is a registered trademark of Horizon Investments, LLC

©2025 Horizon Investments, LLC.

Earn free CE credits and discover new strategies