Data Blackout Clouds Q3 Growth Picture, but Early Signals Still Point to Solid Expansion — Evening Brief – 11.04.25 

Estimating U.S. economic growth for the third quarter has become increasingly speculative as the government shutdown delays the release of official data. The Bureau of Economic Analysis was scheduled to publish the first estimate of Q3 GDP last Thursday, but its release—along with key data on employment, inflation, consumer spending, and income—has been postponed indefinitely. In the absence of official figures, economists are relying on partial private-sector indicators and Fed-based models to gauge the health of the economy. While uncertainty has risen sharply, the available data still points to a solid expansion in Q3, albeit slower than the second quarter surge. 

Consensus estimates currently put Q3 GDP growth near 2.8% annualized, down notably from 3.8% in Q2. If accurate, the Q3 print would mark the sixth consecutive quarter of growth and remain well above the economy’s estimated potential growth rate of roughly 1.8%. 

One of the more reliable real-time gauges of activity, the Dallas Fed’s Weekly Economic Index (WEI), stands at 2.0% for the week ended October 25, implying four-quarter GDP growth just under 2.1%, slightly below Q2’s pace. However, several WEI inputs—including initial jobless claims—have not been updated, making current readings less dependable. 

The Atlanta Fed’s GDPNow model remains relatively bullish, estimating 3.9% Q3 growth, supported by robust contributions from consumer spending and business investment. Yet the model’s margin of error has widened considerably because many source inputs—such as retail sales, construction spending, and wholesale inventories—have not refreshed.  

Historically, GDPNow has a root-mean-square error of roughly 0.8 percentage points at this stage in the quarter, suggesting actual GDP could land anywhere between 3.1% and 4.7%—and the error is likely larger this time given the data blackout. 

The shutdown itself is beginning to dent economic performance. The Congressional Budget Office (CBO) estimates the closure is shaving off approximately $7–$8 billion from GDP per month, or 0.15 to 0.20 percentage points of quarterly growth, some of which will be permanently lost rather than recovered. If the shutdown were to extend into December, it could trim Q4 growth by 0.5 to 1.0 percentage point, according to several private-sector forecasts.  

For now, it remains reasonable to conclude that the U.S. economy grew at a moderate, above-trend pace in Q3, powered by stable consumption and late-cycle services strength. The outlook for Q4 is dramatically more uncertain: without timely data, forecasting models will degrade in accuracy, leaving both economists and the Federal Reserve largely “flying blind” into year-end.