GDP ‘nowhere near’ 4.3%: economist dismisses Q3 report as ‘fugazi,’ pegs real growth at 0.8%
While the U.S. Bureau of Economic Analysis (BEA) reported a robust 4.3% annual increase in third-quarter real gross domestic product (GDP) on Tuesday, economist David Rosenberg is calling the headline number a “fugazi.”
The president of Rosenberg Research argues that underlying economic weakness is being masked by government spending and depleted savings, calculating “true” growth at a meager 0.8%.
The official BEA release shows widespread gains, with real GDP accelerating from 3.8% in the second quarter to 4.3% in the third. The increase was driven primarily by consumer spending, exports, and government spending.
However, Rosenberg contends these figures are misleading. “If you think the CPI data was manipulated, so was today’s GDP report,” Rosenberg stated on X.
He argues that once government spending, shifting import data, and a “sharp drawdown” in the personal savings rate are stripped away, the economy is barely expanding. He specifically points to “flat personal disposable income growth” as a critical red flag contradicting the apparent consumption boom. [Continue reading…]
The federal government’s monthly releases of economic statistics — especially the inflation rate and growth as tracked by gross domestic product — have long occasioned partisan preening (or denunciation) and for a general public stock-taking of the health of the economy.
Not this month. This time, they’re the occasion for doubt and confusion.
On Dec. 18, the Bureau of Labor Statistics reported that inflation had fallen to an annual rate of 2.7% in November, down from 3% in September and well below the 3.1% consensus of economists. And on Tuesday, the Bureau of Economic Analysis reported that real gross domestic product had shot up by a surprising 4.3% annual rate in the third quarter of 2025 ended Sept. 30.
Unsurprisingly, the Trump administration and its Republican acolytes seized on the figures to boast about Trump’s economic policies. White House economic advisor Kevin Hassett proclaimed the inflation figure to be “an absolute blockbuster report.” He described the GDP figure as “a great Christmas present for the American people.”
“America is winning again,” crowed House Speaker Mike Johnson (R-La.) after the GDP report. He called it “the direct result of congressional Republicans and President Trump delivering policies that drive growth and expand opportunity for American families and workers.”
Um, not so fast.
The economists whose jobs involve scrutinizing those statistics to glean what they really mean don’t view them as unalloyed support for Trumponomics. Quite the contrary. Many see them as artifacts of the long government shutdown, which halted the collection of data that go into those reports, severely distorting the results. Furthermore, they expect the flaws in those reports to persist well into 2026, undermining their usefulness as true economic indicators. [Continue reading…]