US Economy Grows 3.4 Percent in Third Quarter
The US economy grew at a 3.4 percent annual rate in the third quarter, up from 2.2 percent, as investment and consumer spending drove the expansion higher.
US GDP growth third quarter came in stronger than expected, with the Bureau of Economic Analysis reporting on October 29 that real gross domestic product grew at an annual rate of 3.4 percent in July, August, and September, up from 2.2 percent in the second quarter and above the 3.2 percent economists had forecast. The advance estimate is the first of three readings for the quarter, built before all source data are in, with the second estimate due November 25. In current dollars, before adjusting for prices, GDP grew at a 5.6 percent annual rate, reaching $33.01 trillion. The actual quarter-to-quarter increase was about 0.8 percent, which compounds to the 3.4 percent annual rate quoted in headlines.
The bureau attributed the increase to rises in investment, consumer spending, and government spending, partly offset by a fall in exports and a rise in imports, which subtract from GDP because the measure counts only what is produced domestically. Real final sales to private domestic purchasers, a gauge of underlying demand from households and businesses, increased 4.9 percent, up from 4.6 percent in the previous quarter. Equipment investment rose 20.9 percent, and inventories added 1.6 points to growth, while surging imports subtracted 2.6 points. Computers and peripheral equipment, health care, meals, and prescription drugs were among the important sources of growth named in the technical notes.
US GDP growth third quarter in context
The 3.4 percent figure describes a pace, not the amount the economy grew in three months, and it will be revised as more data arrive. Even so, it sets a stronger starting point for the final months of 2026, and it gives the Federal Reserve, which held rates steady the evening before, another strong number to weigh alongside inflation data. For businesses, the details matter as much as the headline: private demand is growing, companies are investing in equipment, and consumers are still spending. The next reading will show whether that strength held through the autumn, and whether the inventory build that helped the third quarter turns into sales or into stock sitting on shelves.
Source: MAS Economics
