US GDP growth accelerates to 3.4% in third quarter of 2026
The US economy expanded at an annualized 3.4% pace in the third quarter of 2026, up from 2.2% in the second quarter, the Bureau of Economic Analysis said in its advance estimate.
The pickup was driven by stronger investment, higher consumer spending and a rebound in government outlays, the BEA said. These gains were only partly offset by a drop in exports, while imports, which subtract from GDP, rose further.
Investment growth was led by private inventory building and higher spending on equipment, particularly information processing equipment. Consumer spending rose across both services, led by health care and food services, and goods, led by nondurable items such as prescription drugs.
Government spending increased mainly due to federal nondefense outlays, linked to a slower pace of crude oil sales from the Strategic Petroleum Reserve compared with the prior quarter. Exports fell, led by petroleum products, while capital goods imports rose.
Real final sales to private domestic purchasers, a gauge combining consumer spending and fixed investment, rose 4.9% in the quarter, up from 4.6% in the prior period. Inflation measures cooled: the gross domestic purchases price index rose 3.0%, down from 5.6%, while the personal consumption expenditures (PCE) price index increased 2.1%, versus 5.0% previously. Core PCE, excluding food and energy, rose 2.5%, down from 3.3%.
The BEA will release its second estimate for third-quarter GDP, along with corporate profits data, on November 25, 2026.
Why it matters for markets: Faster growth alongside cooling inflation readings can shape expectations for Federal Reserve policy, influencing US Treasury yields and the US dollar. Stronger consumer and investment activity also tends to support risk sentiment in equity indices such as the S&P 500.
Source: US BEA