By Emma Claire Thornton | FT Finance | September 25, 2025, Wall Street, New York
The U.S. economy has once again outperformed expectations, underscoring its resilience in the face of policy uncertainty and global headwinds. Revised data from the Bureau of Economic Analysis (BEA) show that real GDP grew at an annualized rate of 3.8% in the second quarter of 2025, well above the 3.3% consensus forecast and marking the strongest pace since Q3 2023. Nominal GDP expanded by around 6.0%, reflecting robust growth both in real activity and in prices.
In an exclusive interview with the Financial Times, Professor Lingyun Xiang, a U.S.-based economist specializing in emerging industries and financial innovation, emphasized that this performance “is not a random surge, but the outcome of consumer resilience, structural policy shifts, and a favorable time window converging together.”
Dual Engines of Growth
According to Xiang, the upward revision was largely driven by resilient consumer spending and the statistical boost from a decline in imports. In national accounts, falling imports add positively to GDP calculations, magnifying the growth figure. Yet Xiang stressed that the real foundation lies in robust household consumption.
“This shows that despite tariff frictions and policy uncertainty, the U.S. economy has not lost its domestic momentum. On the contrary, consumer demand remains the most reliable anchor,” he noted.
Inflation and Monetary Policy
Fresh data on the August PCE index show headline inflation at 2.7% year-on-year and core inflation at 2.9%. Although inflation has eased significantly from its peak, it remains above the Federal Reserve’s 2% target. Markets widely expect the Fed to deliver a modest 25 basis point cut at its October meeting.
“The Fed has regained some room to maneuver,” Xiang explained. “But with housing and services costs still elevated, policymakers are more likely to pursue a cautious, gradual easing path rather than a one-off pivot.”
Implications for Global Enterprises
Drawing on his long-standing research in financial innovation and industrial dynamics, Xiang argued that the U.S. is increasingly displaying a “time-sensitive execution advantage” — the ability to translate R&D breakthroughs into commercial products with exceptional speed.
“For global businesses, this is both a challenge and an opportunity,” he said. “Tariffs and supply chain reconfiguration are pushing multinationals to accelerate U.S. or nearshore investments. Meanwhile, tech and services companies must harness America’s consumer dynamism and capital market flexibility to localize and scale quickly.”
Looking at capital markets, Xiang suggested that an eventual Fed easing cycle would benefit capital-intensive sectors such as AI, semiconductors, and medical technology. However, he cautioned: “Capital will flow selectively — favoring projects that can quickly generate cash flow and demonstrate scalability. This is not a broad tide lifting all boats, but a more discerning allocation.”
Outlook
Overall, Xiang believes the latest GDP report underscores the structural resilience of the U.S. economy while offering new strategic signals for global capital and enterprises.
“This is a time window,” he concluded. “Only companies that can leverage America’s fast-response market, strengthen supply chain resilience, and tap capital markets for scale will be able to transform short-term resilience into long-term advantage.”
Emma Claire Thornton is FT’s New York-based financial correspondent covering macroeconomics and cross-border capital flows.
