Third-Quarter GDP Grows at 3.4% Rate as Investment Surges, BEA Says
Real GDP grew at a 3.4% annual rate in the third quarter, up from 2.2% in Q2, BEA said Oct. 29. Core PCE prices rose 2.5%, down from 3.3%.
Why it matters
- Real GDP rose at a 3.4% annual rate in the third quarter, the Bureau of Economic Analysis said Thursday, Oct. 29, in its advance estimate. Growth was 2.2% in the second quarter.
- Investment added 3.27 percentage points, led by inventories and equipment. Consumer spending added 2.52 points. A 19.7% jump in imports subtracted 2.64 points.
- Quarterly inflation cooled. The GDP price index rose 2.3% and core PCE prices 2.5%, after 6.1% and 3.3% in Q2. But September PCE prices rose 3.6% from a year earlier.
Data Brief: a summary of published data, with our notes on what it shows.
The U.S. economy grew at a 3.4% annual rate in the third quarter, up from 2.2% in the second, the Bureau of Economic Analysis said Thursday, Oct. 29, in its advance estimate. Investment, consumer spending and government spending rose. Exports fell, and imports, which are subtracted from GDP, rose.
At a quarterly rate, real GDP grew 0.8%, BEA said. Current-dollar GDP rose at a 5.6% annual rate.
What drove third-quarter GDP growth?
Investment did the most. Gross private domestic investment added 3.27 percentage points to growth, according to BEA's historical comparisons table. Private inventories added 1.61 points, led by wholesale trade and manufacturing. Equipment added 1.16 points, led by computers and peripheral equipment, BEA said.
Consumer spending rose at a 3.8% rate and added 2.52 points. Services led, mainly health care and restaurant meals. Government spending added 0.90 point, almost all from federal nondefense spending. BEA said that rise reflected smaller crude oil sales from the Strategic Petroleum Reserve than in the second quarter, which has no direct effect on GDP.
Trade pulled growth down. Exports fell at a 5.7% rate, led by petroleum products, and imports rose 19.7%, led by capital goods. Net exports subtracted 3.32 points.
Real final sales to private domestic purchasers, consumer spending plus private fixed investment, rose 4.9%, compared with 4.6% in the second quarter.
| Real GDP, annual rate | Q3 2026 | Q2 2026 |
|---|---|---|
| Real GDP growth | 3.4% | 2.2% |
| Consumer spending, contribution | +2.52 pts | +2.51 pts |
| Investment, contribution | +3.27 pts | +0.82 pts |
| Government, contribution | +0.90 pt | -0.01 pt |
| Net exports, contribution | -3.32 pts | -1.10 pts |
| Final sales to private domestic purchasers | 4.9% | 4.6% |
| GDP price index | 2.3% | 6.1% |
| PCE price index | 2.1% | 5.0% |
| Core PCE price index | 2.5% | 3.3% |
Source: BEA advance estimate and historical comparisons, Oct. 29. Core PCE excludes food and energy.
Did inflation cool in the third quarter?
Yes, on a quarterly basis. The GDP price index rose at a 2.3% annual rate, after 6.1% in the second quarter, BEA data show. The PCE price index rose 2.1%, after 5.0%. Core PCE prices rose 2.5%, after 3.3%.
September PCE inflation
BEA also released September personal income and outlays at 8:30 a.m. ET. The PCE price index rose 0.5% from August and 3.6% from a year earlier, up from 3.4% in August. Core PCE prices rose 0.3% in the month and 3.1% from a year earlier, up from 3.0%.
Personal income rose 0.2% and consumer spending rose 0.5%. Adjusted for prices, spending was nearly flat. The saving rate fell to 3.8% from 4.0%, BEA said.
The Labor Department said separately that seasonally adjusted initial jobless claims fell 1,000 to 194,000 in the week ending Oct. 24.
What does the GDP report mean for the Fed?
The Fed held its target range at 3.75% to 4% on Oct. 28 in a 10–2 vote, its statement said, and two members wanted a hike. Read our Fed October 2026 decision story. The next meeting is Dec. 8–9, according to the Fed's calendar; our FOMC meeting schedule for 2026 and 2027 has every date. For market moves, see the 10-year Treasury yield today.
BEA's second estimate of third-quarter GDP, and the October personal income report, are due Wednesday, Nov. 25, at 8:30 a.m. EST.
Sources
- U.S. Bureau of Economic Analysis, GDP (Advance Estimate), 3rd Quarter 2026 (Oct. 29, 2026), full release PDF and historical comparisons
- U.S. Bureau of Economic Analysis, Personal Income and Outlays, September 2026 (Oct. 29, 2026) and historical comparisons
- U.S. Department of Labor, Unemployment Insurance Weekly Claims (Oct. 29, 2026)
- Federal Reserve, FOMC statement, Oct. 28, 2026 and meeting calendars
