The US economy grew at a 3.4% annual rate in the third quarter, the Bureau of Economic Analysis said in its first estimate on Thursday — its fastest pace in a year, and ahead of the 3.2% economists had forecast. Growth accelerated from 2.2% in the second quarter.
Consumers did much of the heavy lifting. Personal consumption spending rose 3.8% for the second quarter running, led by healthcare, restaurants and hotels, even as households saved just 4.1% of their after-tax income — the lowest share in nearly four years.
Business investment was the other engine. Nonresidential investment rose 12.7%, with equipment spending up 20.9%, led by information-processing equipment — the computers and hardware behind the artificial intelligence data-centre buildout. Government spending rose 5.3% after a slight decline in the spring.
There were weak spots: housing activity fell 3.3%, exports dropped, and imports surged, subtracting from overall growth. Inflation also remains above the Federal Reserve’s target — the PCE price index rose 3.6% in the year to September.
The report landed less than a week before the US midterm elections, and a day after the Federal Reserve left interest rates unchanged at 3.75%–4.00% while noting inflation “remains elevated”.
Sources: US Bureau of Economic Analysis advance GDP estimate (29 Oct 2026), via Barron’s and Reuters reporting.
