Overview
- The Commerce Department's advance estimate, released Thursday, reported annualized real GDP growth of 3.4% in the third quarter, above the roughly 3.1% consensus and faster than Q2's 2.2% pace.
- Consumer spending was a central driver, rising at a 3.8% annualized rate and accounting for most of the gain given that household outlays make up about two-thirds of GDP.
- Business investment and government spending also added to growth, with total government outlays up 5.3% annualized and federal expenditures jumping 15.8% while state and local spending slipped.
- Net trade subtracted from GDP as exports fell and imports rose, and inventory rebuilding concentrated gains in wholesale trade and manufacturing.
- The print arrived a day after the Federal Reserve left its policy rate at 3.75%–4% and came with warnings that durable inflation and a possible surge in AI-related investment could complicate future rate decisions; the BEA's advance estimate may be revised in later releases.