U.S. GDP sees healthy growth

Overview

The episode explores the U.S. economy's robust GDP growth in Q3 2025, driven by consumer spending, despite uneven economic conditions. It also examines the challenges of finding affordable health insurance alternatives, the rising costs of homeowner's insurance due to climate risks, and the economic impact of winter surfing in the Great Lakes region. Additionally, it highlights holiday spending trends and their implications for consumer confidence.

Notable Quotes

- Households are just going to continue to spend until they're somewhat forced not to. – Michael Peirce, on the resilience of consumer spending despite economic pressures.

- Cheaper coverage, the holy grail so many people are looking for right now, does not exist. – Amy Killeleh, on misleading health insurance alternatives.

- Insurance premiums have grown over 25% in real terms since 2019, dramatically faster than the rate of inflation. – Ben Keyes, on the rising costs of homeowner's insurance.

📈 U.S. GDP Growth and Consumer Spending

- GDP grew by an annualized 4.3% in Q3 2025, the highest in two years, largely fueled by consumer spending.

- Shannon Grein of Wells Fargo highlighted real final sales to private domestic purchasers as a key metric, which rose 3%, indicating strong domestic spending.

- Despite economic momentum, Michael Peirce noted that income growth has not kept pace, revealing a split between higher-income and lower-income households.

- Certain sectors, like AI-related investments, are thriving, while others, such as homebuilding, are cutting back.

💊 Affordable Care Act Alternatives and Risks

- Many consumers are exploring cheaper health insurance options as ACA subsidies expire, but alternatives like short-term plans and healthcare sharing ministries often lack comprehensive coverage.

- Amy Killeleh warned about deceptive marketing tactics, such as brokers promoting private exchanges, which do not exist.

- Short-term plans can deny coverage for pre-existing conditions and lack essential health benefits mandated by ACA plans.

- Experts emphasized the risks of relying on non-ACA options, which may leave consumers vulnerable to massive medical bills.

🌪️ Rising Homeowner's Insurance Costs and Climate Risks

- Homeowner's insurance premiums have surged over 25% since 2019, driven by inflation, rebuilding costs, and increased climate risks.

- Ben Keyes explained that premiums are rising disproportionately in high-risk areas prone to wildfires, hurricanes, and storms.

- Higher insurance costs are affecting housing prices, as buyers factor these expenses into their purchasing decisions.

- Insurers are incentivizing homeowners to invest in climate resilience, but the long-term benefits of such investments remain uncertain.

🛍️ Holiday Spending and Consumer Confidence

- Despite a drop in consumer confidence for the fifth consecutive month, holiday spending rose by 3.9% (MasterCard) to 4.2% (Visa) compared to last year.

- Consumers started shopping earlier, driven by a mix of excitement and anxiety, aiming to secure deals and essentials.

- Spending trends reveal a divide: higher-income consumers splurge on luxury items, while lower-income households rely on credit and buy-now-pay-later options.

🏄 Winter Surfing and Economic Impact in the Great Lakes

- Winter surfing is gaining popularity in the Great Lakes, with enthusiasts braving freezing waters for the thrill of the sport.

- Chad Nelson, a surfing economist, noted that surfers contribute significantly to local economies by spending on gear, food, and travel.

- Social media has fueled interest in Great Lakes surfing, boosting tourism and surf-related businesses like Sleeping Bear Surf in Michigan.

- The camaraderie among surfers and the unique appeal of winter waves are driving the sport's growth in the region.