Overview
- The Bureau of Economic Analysis advance estimate released Thursday showed real GDP grew at a 3.4% annualized rate in the third quarter, beating economists' roughly 3.1% forecast.
- Consumer spending strengthened, rising about 3.8% annualized and remaining the largest share of U.S. output.
- Business investment jumped sharply, with equipment purchases up roughly 20.9% as firms spent on AI and data-center technology, though many of those goods were imported which reduces their net contribution to U.S. GDP.
- The Fed's preferred inflation gauge, the PCE price index, accelerated to 3.6% year-over-year in September, keeping price growth well above the Fed’s 2% target.
- Economists cautioned the GDP figure is an advance estimate subject to two revisions and that gains were boosted by inventories and timing of federal spending, so policymakers will weigh both the upside momentum and compositional caveats when deciding on future interest-rate moves.