This story has moved onFed's Preferred Inflation Gauge Accelerates in OctoberLatest · Oct 29 · 1 newer step

Updated 4h ago · Business

US Economy Grows 3.4% on Consumer Spending, AI Investment

The U.S. economy expanded at a 3.4% annualized rate in the third quarter, the government reported Thursday. Consumer spending and AI investment drove the gain.

3.4% growth topped economists' forecasts of 3.1% to 3.2%.
2.2% was second-quarter growth; the first quarter came in at 2.5%.
3.6% annual inflation in September, after a 0.5% monthly rise.
3.1% core inflation, excluding food and energy, matched forecasts.

Why it matters: The Trump administration gets a strong growth number days before the midterms. Persistent inflation has weighed on Republicans' economic approval ratings.

61% in a Harris Poll and Guardian survey think the U.S. is in recession.
Consumer sentiment hit its second-lowest reading on record this month.

The story so far

5 steps · since Oct 28

Oct 2810:21 AMFed Holds Rates Steady Amid Inflation Concerns64 sources
Oct 282:55 PMWarsh Plans to Eliminate Some Fed Rate-Setting Meetings5 sources
Oct 297:41 AMFed's Preferred Inflation Gauge Rises Slightly in September14 sources
Oct 298:37 AMUS Economy Grows 3.4% on Consumer Spending, AI InvestmentYou are here
Oct 298:43 AMFed's Preferred Inflation Gauge Accelerates in October3 sourcesLatest

How 36 sources split on this story

Source landscape

Factuality

High

Mixed

Low

Strong LeftLeftLean LeftCenterLean RightRightStrong Right

Political Bias

Coverage by lean% of 36 sources

36 sources · 40 articles · 42% Center coverage

Where they split: Coverage divides on whether faster growth or stubborn inflation and household strain is the bigger story.

Center coverage, 15 sources: The center pairs the better-than-expected growth with September's acceleration in inflation.

CNBC18hThird-quarter U.S. GDP increases a better-than-expected 3.4% as September inflation accelerates Associated Press18hUS economy grows at brisk 3.4% pace in third quarter on strong consumer spending and AI investment Axios18hU.S. economy races ahead with 3.4% growth in third quarter Bloomberg18hUS Economy Grows Faster-Than-Expected 3.4%, Most in a Year Financial Times18hUS economy beats forecasts to grow at 3.4% rate in third quarter KSAT 12 San Antonio18hUS economy grows at brisk 3.4% pace in third quarter on strong consumer spending and AI investment MarketWatch18hU.S. economy grows at fastest pace in almost three years, third-quarter GDP shows NPR18hWith days to go before the midterms, data shows the U.S. economy is doing well PBS NewsHour15hU.S. economy grows at brisk 3.4% pace in third quarter on strong consumer spending and AI investment RealClearPolitics5hReal GDP Rose 3.4%--Get Out There and Sell It, Republicans Semafor8hUS economy grows faster than expected The Hill16hUS GDP grew by 3.4 percent in third quarter amid AI investment boom The National Desk11hPreliminary GDP report shows strong 3.4% growth for US economy USA Today18hUS GDP growth accelerated in third quarter, surpassing expectations WGAL 89hPresident Trump touts economic gains, but not all Americans feel the benefits

Left coverage, 6 sources: The left frames the report as faster growth driven by consumer spending and AI investment.

The Independent18hUS economy grew at brisk 3.4% pace in third quarter on strong consumer spending and AI investment ABC News18hUS economy grew at 3.4% annualized rate in 3rd quarter, government data shows CNN18hLast snapshot of the US economy before midterms shows stronger growth but higher inflation Political Wire18hU.S. Economy Grows Faster Than Expected The Guardian18hUS economy grows faster than expected in report out just ahead of elections The New York Times18hU.S. G.D.P. Increased in Third Quarter

Right coverage, 15 sources: The right sees a boost for Trump ahead of the midterms, tempered by stubborn inflation and squeezed households.

Daily Mail18hMajor boost for Trump as America's economy roars back and GDP surges... Despite stubborn inflation and squeezed households Washington Examiner18hEconomy expanded at 3.4% rate in third quarter in sign of underlying strength Just the News1dGDP increases by 3.4% in third quarter, exceeding Wall Street expectations Breitbart News16hWhere GDP Growth Came From: Investment Boom Powers U.S. Economy Despite Tech Sector's Import Dependence Conservative Treehouse12h3rd Quarter GDP Comes in Strong at 3.4% Growth - Even with Massive Increase in Imported Industrial Purchases, "The AI Factor" - The Last Refuge New York Post15hUS economy grows at surprising 3.4% rate, powered by consumer spending, AI investment NewsBusters14hStrong GDP Growth Continues to Exceed Expectations in 3rd Quarter Newsmax18hQ3 GDP Rises to 3.4% on Robust Consumer, AI Spending NTD12hUS Economy Gains Momentum as 3rd-Quarter GDP Grows Better-Than-Expected 3.4 Percent RedState19hNew Economic Numbers Are In, and Trump Has Plenty to Smile About RSBNetwork10hEconomic growth stats for 3rd quarter reveal surprising results The Epoch Times1dUS Economy Picks Up Momentum as 3rd Quarter Growth Beats Expectations The Washington Times17hU.S. economy grew faster over the summer, as consumers keep spending despite high prices Townhall21hJust Days Before Midterms, GDP Growth Surges Past Expectations to 3.4 Percent ZeroHedge17hUS Economy Grows 3.4% In Q3, Fastest Pace In A Year, Supercharged By Massive AI Capex Spending

What’s next: Two more estimates of third-quarter growth will follow this preliminary figure.

The Fed held rates steady Wednesday. Chairman Kevin Warsh said, "High-tech investment is leading the acceleration."
Will AI-driven business investment keep growth at this pace?
Will stronger growth shift voters' views of the economy before the midterms?
How much will later estimates revise the 3.4% figure?