• A senior Treasury official highlighted robust economic momentum, suggesting Q3 2025 GDP growth approached 4%.
  • The statement contrasts with preliminary estimates showing a significant slowdown to 1.9% from Q2's strong 3.8% performance.
  • The comment underscores the administration's focus on economic strength amid headwinds from trade tensions and fiscal uncertainty.

A senior U.S. Treasury official pointed to surprisingly strong economic momentum in the third quarter, a characterization that appears to reference the prior quarter's performance as current data shows growth moderating.

Speaking on background, the official, identified as former White House economist and current Treasury advisor Joseph Lavorgna, told a gathering of financial analysts that "it appears we moved close to 4% GDP growth in Q3." The remark, confirmed by two people familiar with the discussion, has drawn attention for its bullish tone relative to the emerging economic picture.

Preliminary estimates from government statistical agencies, however, indicate real GDP growth for the third quarter of 2025 came in at an annualized rate of 1.9%. This represents a notable deceleration from the second quarter's final reading of 3.8%, which was the strongest quarterly performance since late 2023. That Q2 figure was itself revised upward multiple times from an initial estimate of 3.0%.

Lavorgna's comment seems to reflect the administration's emphasis on the economy's underlying resilience rather than the most recent snapshot. The second quarter's strength was driven by robust capital investment and surprisingly persistent consumer spending, factors that Treasury officials have consistently highlighted. Efforts to reach Lavorgna for clarification on the timing referenced in his statement were unsuccessful.

"The baseline is strong," the official reportedly said, according to one attendee. "We're seeing the momentum from a very solid first half carrying forward, even with the crosscurrents."

Those crosscurrents are significant. Economists cite mounting headwinds for Q3, including renewed trade tensions, fiscal uncertainty linked to potential federal government funding gaps, and ongoing geopolitical conflicts. The Federal Reserve Bank of Atlanta's GDPNow model had initially projected a much stronger Q3, around 3.8%, but other forecasts, like the Philadelphia Fed's Survey of Professional Forecasters predicting 1.3%, captured the growing sense of a slowdown.

Market reaction was muted, with Treasury yields holding steady. The 10-year yield was trading around 4.35% following the reports, little changed on the day. The yield had declined modestly through the quarter from earlier highs, reflecting some investor flight to quality amid the uncertainty Lavorgna referenced.

For the full 2025 calendar year, most private forecasters project growth between 1.8% and 2.0%, anticipating a moderation in the latter half. The Treasury's focus on the high-side potential, even as data cools, signals a continued effort to project economic confidence. Whether the final Q3 number, to be released in the coming weeks, revises closer to the official's optimistic hint or confirms the preliminary slowdown remains a key data point for markets and policymakers alike.

Correction: An earlier version of this article misstated the current quarter's preliminary GDP estimate. It is 1.9%, not 2.1%.