Consumer spending, which makes up the largest share of economic activity in the United States, increased at its fastest rate in the third quarter since the beginning of 2023.

That may be an encouraging sign as the promotional products industry is in the midst of the holiday season rush – traditionally, its busiest period of the year.

In fact, consumer spending rising 3.7% largely powered the nation’s economic expansion in Q3, according to the U.S. Commerce Department’s Gross Domestic Product (GDP) advance estimate released on Wednesday.

  • The U.S. economy expanded at a 2.8% annualized rate in Q3, slightly below Q2’s 3% growth rate, reflecting strong resilience amid global uncertainty and upcoming elections, Bloomberg reported.


“With consumer spending at its highest pace since early 2023, demand for promotional products could remain stable or grow as consumers are still willing to spend despite economic pressures,” says Alok Bhat, market economist and senior manager of research and public affairs for PPAI.

With consumer spending at its highest pace since early 2023, demand for promotional products could remain stable or grow as consumers are still willing to spend despite economic pressures.”

Alok Bhat

Market Economist & Sr. Manager of Research & Public Affairs, PPAI

Potential Rate Cuts

Underlying inflation rose 2.2% in Q3, aligning with the Federal Reserve’s target, indicating controlled inflationary pressure.

  • In August and September, the promo industry’s revenue grew by 2.2% over the same period last year, surpassing 2% growth over a two-month period for the first time in 2024 and up from the 1.75% growth rate of June and July.


As a result, the Fed is expected to continue easing interest rates in the coming quarters after reducing its benchmark rate, which affects interest rates for credit cards, mortgages, auto loans and more, in September for the first time since the COVID-19 pandemic.

  • The benchmark rate was reduced by 0.5% to a range of 4.75% to 5%, down from its prior range of 5.25% to 5.5%, which had been its highest level in 23 years.

Reduced rates will come as a relief to both consumers and business owners, as they could encourage more consumer spending, which could indirectly benefit the branded merchandise industry.

More Q3 Stats

The trade deficit trimmed 0.56% from the GDP in Q3, according to the data.

“Rising imports impacting GDP reflect ongoing challenges with trade and supply,” Bhat says. “Firms may need to closely monitor supply chain costs and delays, especially for imported promotional products.”

  • Nonresidential investment grew by 3.3%, with computers and AI-related tech experiencing a 32.7% surge.
  • Residential investment declined by 5.1%, impacted by high mortgage rates and housing prices.
  • Government spending increased 5%, the largest federal spending growth since early 2021.