The US economy grew at a real, after inflation, rate of 4.3% in the third quarter of 2025, according to a Bureau of Economic Analysis release. This was up from an estimated increase of 3.8% in the second quarter and well above expectations. Consumer spending, which is over two-thirds of the US economy, not surprisingly contributed 2.4 of the 3.8 percentage point increase. A contributor to the growth was exports, more precisely, the excess of imports over exports declined, likely due to some of the tariff machinations subsiding. Investment, which has been touted by the Trump administration, was actually a drag on growth, and government spending also contributed to the economic growth, which I view as a negative.
The real negative, however, is in the details of the consumer spending increase. An astounding .76, or a third, of the total 2.4 percentage point rise in consumer spending was due to health care. This is not particularly productive spending and is more an indicator of consumer stress than economic growth. Other big increases in consumer spending were for other services, recreational goods and services and financial services and insurance. Declines occurred in motor vehicles, again likely driven by expiration of paying people to buy electric cars, and in purchases of furniture and appliances. The price index increased 3.8%, also much higher than expectations and not a good sign for inflation. (BEA Release)
quote from — https://justthenews.com/government/white-house/trump-defies-odds-achieves-economic-hat-trick-rate-cuts-tariffs-and-cooling
>>That is, that tariffs usually reduce how much the country imports. To pay for imports, a country needs to sell exports. If imports go down, exports typically go down too, since the two are closely linked in the economy.
When exports fall, the goods that used to be exported now stay at home. These are things the country is especially good at producing efficiently. With more of them available domestically (instead of being shipped out), their prices inside the country tend to drop due to extra supply.
Economist and originator of the famed Laffer curve, Art Laffer, spoke exclusively to Just The News and stated it this way: “Tariffs do not raise overall prices simply because the increase in the domestic prices of imports (products more efficiently produced abroad) are offset by the fall in domestic prices of formerly exported products (more efficiently produced domestically.)” <<
But Trump and "other Geniuses" got it right….
https://truthsocial.com/@realDonaldTrump/posts/115769520157248739
Trump got it dead wrong, there has been no reduction in the trade deficit, no increase in manufacturing in the US and no massive amount of revenue from tariffs. What you describe is simply not at all what happens. When a country has a trade deficit and we have a big one that hasn’t changed, all the dollars that foreign producers earn from those imports have to be recycled and they have been recycled not by buying exports from the US, but by buying all that excess debt we are creating from our huge annual deficits. If we really cut the trade deficit, that dollar surplus would not be created and we would have a terrible time selling all that debt and interest rates would be much higher. When exports fall, the same amount of goods are not created as you assume, people just stop making as much because demand is lower, and those exporting companies need fewer workers, buy fewer supplies and have less profits to reinvest. the overall effect is to suppress demand in the US as well. The Laffer quote is somewhat accurate but if you looked at the total picture he painted you would see that he said that overall demand would fall, which hurts the economy and workers. He has also been proven wrong over and over to suggest that tariffs somehow magically lower the cost or price of domestically produced goods. In fact, they raise the price by removing competition. As I said at the start, Trump’s tariffs are achieving exactly none of the goals he said they would achieve.
Thank you for the detailed explanation, but my comment was somewhat ironic, thus the “Geniuses” quote. I hope you’ll make a separate post from this comment so others might benefit from it. Merry Christmas, and Happy Holidays!
my bad to not recognize that, I thought there might be a trace of it but wasn’t sure