In the second and third quarters of 2025, the U.S. economy grew at its fastest pace in two years. Those growth rates were not “numbers unheard of,” or figures the U.S. “never had” before, as President Donald Trump has claimed.
In addition, economic experts told us that federal data do not support Trump’s claim that there was economic “stagflation” during the Biden administration and “the complete opposite” during Trump’s first year back in office. Inflation was high during much of Joe Biden’s presidency, but economic growth was not stagnant, another key indicator of stagflation, the experts said.
They also said that Trump’s tariff policies likely hindered economic growth, rather than helped spur it, as the president has suggested.
Trump made those claims while touting the U.S. economy in recent speeches and remarks, as well as in a late January opinion piece written for the Wall Street Journal.
Economic Growth
During a Jan. 27 speech in Iowa, Trump said, “So, under my leadership, economic growth is exploding to numbers unheard of. They’ve never had them before.”
He later said in an interview with NBC News on Feb. 4, “We have low inflation and we have tremendous growth. You haven’t had these numbers like this.”
And when claiming to have achieved “unprecedented” growth numbers in a Jan. 29 Cabinet meeting at the White House, Trump said that if not for the 43-day federal government shutdown last fall, “we would have picked up about a point and a half more than [the] already high numbers, record setting numbers.”
While the U.S. economy grew significantly in the second and third quarters of 2025, according to the most recent data from the Bureau of Economic Analysis, the numbers did not set records, as Trump claimed.
After declining by an annualized rate of 0.6% in the first quarter of 2025, which covers the three months from January to March, real gross domestic product (meaning it has been adjusted for inflation) grew at an annualized rate of 3.8% in the second quarter of 2025 and at a rate of 4.4% in the third quarter. Those were the largest quarterly increases since the third quarter of 2023, under Biden, when the economy expanded at an annualized rate of 4.7%, according to BEA estimates.
The record for quarterly growth is 34.9% in the third quarter of 2020, which happened right after the economy shrunk by 28% at the start of the COVID-19 pandemic. The pre-pandemic quarterly growth record is 16.7% in the first quarter of 1950, according to BEA quarterly data going back to 1947.
On several occasions, Trump has said that fourth quarter growth is projected to be 5.4%, a figure that he has attributed to the Federal Reserve Bank in Atlanta. But that projection is now out of date.
Throughout much of January, the Federal Reserve Bank of Atlanta’s GDPNow model was projecting growth of 5.4% for the fourth quarter of 2025. Then, on Jan. 29, the projection lowered to 4.2%, and, as of Feb. 10, it was down again, to 3.7% projected growth.
The BEA is scheduled to release its advanced estimate of GDP for the fourth quarter, and all of 2025, on Feb. 20.
Stagflation
Trump also has claimed that he turned around an economy that had stalled under Biden.
“Under the Biden administration, America was plagued by the nightmare of stagflation, meaning low growth and high inflation, a recipe for misery, failure and decline. But now, after just one year of my policies, we are witnessing the exact opposite – virtually no inflation and extraordinarily high economic growth,” Trump said at a World Economic Forum meeting on Jan. 21.
He repeated the “stagflation” claim in his Jan. 30 opinion piece published in the Wall Street Journal.
But economists told us that the U.S. economy under Biden did not experience stagflation, which has a specific economic meaning.
“It refers to a sustained period of high inflation combined with weak or stagnant real economic growth, typically alongside rising unemployment,” Kyle Handley, a professor of economics at the University of California, San Diego, told us in an email. “By that definition, the U.S. economy during the Biden years does not qualify as stagflation.”
Handley said that the annual inflation rate did “rise sharply” during Biden’s first two years in office. It peaked in June 2022, at 9.1%, before declining dramatically in Biden’s last two years in office.
“However, real GDP growth during the Biden presidency was positive and often above trend, and unemployment remained historically low,” Handley said. “Real GDP grew strongly in 2021 during the post-pandemic recovery, slowed in 2022 as monetary policy tightened, and then re-accelerated in 2023 and 2024. That is not a period of economic stagnation.”
In an infographic from November, the staff of the Federal Reserve Bank of Cleveland wrote that the “last major case” of stagflation in the U.S. “occurred in the mid-1970s, when global crude oil prices surged, triggering widespread rises in other prices and fueling inflation of more than 12 percent and unemployment that peaked at 9 percent.” The infographic said that stagflation — the combination of rising unemployment and inflation, and slowing economic growth all at the same time — was “rare” and “an unusual pattern.”
When we asked about the basis for the president’s stagflation claim, a White House spokespeson told us that “[r]eal wages shrank markedly during the Biden presidency, and growth – once you put aside the early bit of Biden admin when Democrat state officials finally started lifting unscientific and draconian lockdowns – was tepid with inflation at 40-year highs.”
There was a decrease in real wages under Biden, as we’ve written. But the economy grew by well over 2% each year during his administration, and the rate of inflation, while still elevated, was not near a 40-year high when he left office. The 9.1% annual rate in June 2022 was the highest since November 1981. The rate was 3% in Biden’s final 12 months.
The unemployment rate also decreased under Biden, going from 6.4% when he was inaugurated to 4% in his last month, according to the Bureau of Labor Statistics. The average monthly rate for Biden’s presidency was 4.1%, below the historical average.
“You had high inflation, yes, but paired with strong growth and a robust labor market,” Aeimit Lakdawala, an associate professor of economics at Wake Forest University, told us in an email. “That’s just not stagflation by any standard definition of the term.”
He said that Trump’s claim of engineering a complete turnaround from the Biden economy is an overstatement.
“What we’re really seeing is a continuation of trends that were already well underway before Trump took office in January 2025,” Lakdawala said.
He noted that the annual inflation rate had cooled to 3% when Trump’s second term started. It had been as low as 2.4% in September 2024.
“That disinflation happened under Biden, driven largely by the resolution of supply chain issues and Fed monetary policy,” he said, referring to the Federal Reserve. “Under Trump’s second term so far, inflation has averaged about 2.7%. That’s modestly lower, but it’s not a dramatic reversal.”
Although Trump considers the 2.7% annual inflation rate, as of December, to be “very low” or “virtually no inflation,” it is still above the 2% target set by the Federal Reserve. Prices are still increasing, just at a slightly slower pace than before he became president again.
As for economic growth, Lakdawala said that the increase in real GDP has “averaged about 2.5% annualized so far under Trump’s second term, which is solid but actually a touch lower than the 2.9% we saw” in Biden’s last two years as president.
“So characterizing this as ‘extraordinarily high economic growth’ is a stretch,” he said about Trump’s claim. “It’s good growth, roughly in line with where we’ve been.”
The unemployment rate, meanwhile, was 4.3% in January, slightly higher than when Trump took office.
Tariff Effect
In his Wall Street Journal opinion piece, Trump said that the “entire Trump economic agenda deserves credit for this explosion of growth” — but he specifically gave credit for the country’s “economic success” to his tariff policies.
“We have proven, decisively, that, properly applied, tariffs do not hurt growth — they promote growth and greatness, just as I said all along,” the opinion piece said.
But the experts we consulted told us that the economy likely grew despite the tariffs, not because of them.
“Year-over-year real GDP growth over the past year looks similar to the years immediately preceding the new tariffs,” Handley said. “Outside of the pandemic period, growth has been relatively stable across administrations, which makes it difficult to attribute recent performance to tariffs rather than economic momentum.”
He noted that the tariffs that Trump placed on imported foreign goods last year were not as high as the rates he originally proposed, and that tariff revenue, which did increase significantly in 2025, is still quite small in relation to GDP (about 1% of GDP as of the third quarter of 2025, according to the Federal Reserve Bank of St. Louis).
“By construction, a policy of that size cannot plausibly explain an increase in aggregate economic growth,” he said.
Lakdawala had a similar take.
“Crediting tariffs for economic growth gets the causation backwards,” he said. “The economics on this is fairly clear and there is broad consensus among economists: tariffs are essentially a tax on imports that raises costs for domestic consumers and businesses. If anything, they’ve been a modest drag on growth, not a driver of it.”
He pointed to an analysis done by the Budget Lab at Yale, a nonpartisan research center, that said that in 2025 tariffs slowed real GDP growth by 0.5 percentage points and increased the unemployment rate by 0.3 percentage points. The Budget Lab estimated that tariffs will reduce real GDP growth by 0.4 percentage points in 2026, and said that “[i]n the long run, the US economy is persistently 0.3% smaller, the equivalent of $100 billion annually in 2025 dollars,” because of tariffs.
“These aren’t catastrophic numbers and the economy is resilient and has absorbed the tariff shock reasonably well,” Lakdawala said. “But they clearly point in the wrong direction for someone trying to credit tariffs with economic success.”
The pro-business Tax Foundation also said that Trump’s imposed tariffs, if the Supreme Court rules that some of them can remain in effect, “will raise $2.0 trillion in revenue from 2026-2035 on a conventional basis and reduce US GDP by 0.5 percent, all before foreign retaliation” from other countries.
The White House told us that, under Trump, the “[a]nnualized rate of inflation has been trending in the mid-twos and GDP growth in Q3 surpassed expectations by over a full point, hitting above 4 percent. Largely driven by the investments we are seeing thanks in part to tariffs.”
But Handley noted that many of the investments touted by Trump are “announcements rather than realized outcomes.”
“Foreign investment commitments do not directly enter GDP, and they often reflect projects planned years in advance,” he said, adding that some of the pledges made by foreign countries and companies “may never come to fruition.”
We’ve already written that Trump’s claim that he has brought in about $18 trillion in investments to the U.S. is exaggerated, according to experts and a White House webpage.
Giacomo Santangelo, a senior lecturer of economics at Fordham University, told us in an interview that consumption is the “largest portion” of GDP, and that people are currently taking on more debt to finance that spending. “That’s what’s driving this economy,” he said.
Joseph Brusuelas, chief economist at RSM, wrote in December that the third-quarter growth was due to “[h]ousehold consumption driven by higher-income consumers and AI-related investment,” which he said “accounted for just under 70% of total growth during the [third] quarter.”
In its news release about third-quarter growth in 2025, the BEA said, “The increase in real GDP in the third quarter reflected increases in consumer spending, exports, government spending, and investment.” For the second quarter, the BEA said the increase “primarily reflected a decrease in imports, which are a subtraction in the calculation of GDP, and an increase in consumer spending.”
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