Bessent Predicts 3% U.S. Growth for 2025, Highlights Strong Holiday Spending

U.S. Treasury Secretary Scott Bessent said the economy is on track to close 2025 with approximately 3% real gross domestic product growth, crediting a “very strong” holiday shopping period and resilient quarterly output. Bessent made the remarks on Sunday during an interview on CBS News’ “Face the Nation,” where he argued that economic activity has been more robust than many analysts anticipated earlier in the year.

“The economy has been better than we thought,” Bessent stated, noting that real GDP expanded at roughly 4% in “a couple of quarters.” Despite what he labeled the “Schumer shutdown,” the secretary predicted that annual growth will settle near 3% when final data are recorded. The government shutdown he referenced occurred earlier this fall during congressional budget negotiations.

Recent federal statistics present a mixed picture. According to the Bureau of Economic Analysis, real GDP contracted 0.6% year over year in the first quarter of 2025. The second quarter rebounded sharply, advancing 3.8%. The BEA’s initial estimate for third-quarter performance is scheduled for release on December 23. Meanwhile, the Federal Reserve Bank of Atlanta’s December 5 “GDPNow” model projects third-quarter growth at an annual rate of 3.5%.

Consumer spending, which represents nearly 70% of total U.S. output, remains a critical component of the growth outlook. Early reports from major retailers indicate healthy traffic and sales volumes for the current holiday season, a trend Bessent cited as evidence of “underlying economic strength.” However, sentiment data suggest households remain uneasy. The University of Michigan’s December consumer sentiment index registered 53.3, a 4.5% rise from November but 28% below the reading from one year earlier.

Inflation continues to weigh on purchasing power. The most recent Consumer Price Index report—delayed several weeks because of the federal shutdown—showed prices rising 3.0% year over year in September. Food consumed at home climbed 3.1% during the same period. Although price gains have cooled from the peaks of 2022 and 2023, the pace remains above the Federal Reserve’s 2% target and is widely viewed by economists as a primary driver of consumer unease.

President Donald Trump has rejected the notion that inflation is severely burdening households. During a Tuesday cabinet meeting, the president labeled the term “affordability” a “Democrat scam,” contending that public discussion of rising costs has been exaggerated for political purposes. His comments arrive amid polling that shows headwinds for the administration on economic perceptions. Roughly two-thirds of registered voters surveyed in a recent NBC News poll said the White House is falling short on the economy and the cost of living.

Asked to respond, Bessent linked current price pressures to policies from the prior Biden administration and argued that negative media coverage is coloring public views. “The American people don’t know how good they have it,” he said, asserting that earlier Democratic policies created scarcity through “over-regulation” and constraints on energy supply. He added that he expects the nation to “move on to prosperity” in 2026 as inflation moderates further.

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Retail and manufacturing indicators released over the coming weeks will help clarify whether holiday momentum can offset consumer caution. Analysts are watching job market data, credit card spending patterns, and shipping volumes for signs that households can sustain purchases into the first quarter of next year. Bessent emphasized that continued growth depends on avoiding additional government funding disruptions and advancing legislation aimed at expanding domestic energy production.

Market participants are also monitoring the Federal Reserve’s policy trajectory. The central bank held its benchmark rate steady at its last meeting, citing progress on inflation but maintaining that additional evidence of cooling prices will determine future adjustments. A sustained slowdown in price growth could reinforce Bessent’s projection, while renewed acceleration might dampen real income gains and curb discretionary spending.

The first official snapshot of fourth-quarter GDP will be published in late January. Until then, weekly data on retail sales, unemployment claims, and consumer credit will offer incremental clues. For the moment, administration officials are signaling confidence that solid holiday demand, a rebound from the early-year contraction, and consistent gains in business investment will be enough to meet their 3% target.

Crédito da imagem: David Dee Delgado / Getty Images Entertainment