The U.S. Bureau of Economic Analysis reported a 4.3% annual increase in third-quarter GDP, but economist David Rosenberg calls it a “fugazi.” He argues that true growth is only 0.8%, masked by government spending and depleted savings. Consumer spending, exports, and government spending drove the increase.

Rosenberg believes the GDP numbers are misleading, with the economy barely expanding once certain factors are stripped away. He points to flat personal disposable income growth as a red flag contradicting the apparent consumption boom. The debate rages on between analysts interpreting the data differently.

While the GDP report shows strong growth, some analysts like Gordon Johnson see an inflationary fire. Nominal GDP surged 8.2%, with a GDP price index reading of 3.8%. Johnson questions why 10-year yields are low with such high growth, suggesting the Fed’s actions could lead to more inflation.

The official data supports elements of both bearish views, with imports decreasing and the price index for gross domestic purchases accelerating. Investors are left to decide whether to believe in the headline strength, Rosenberg’s skepticism, or Johnson’s concerns about inflation. Markets are reacting to the report.

Despite federal and economic challenges, the stock market performed well in 2025. The S&P 500, Nasdaq Composite, and Dow Jones all saw gains on a year-to-date basis. ETFs tracking these indices closed higher on Tuesday, but futures were lower on Wednesday as markets digested the GDP report.

Read more at Yahoo Finance: Rosenberg Dismisses Q3 Report As ‘Fugazi,’ Pegs Real Growth At 0.8%