US GDP growth accelerates to 3.4 pc in Q3 2026, up from 2.2 pc in previous quarter

The US economy grew at an annualised rate of 3.4 per cent in the July–September quarter of 2026, accelerating from 2.2 per cent in the previous quarter and exceeding market expectations, according to an advance estimate released by the US Bureau of Economic Analysis (BEA) on Thursday.

The US economy grew at an annualised rate of 3.4 per cent in the July–September quarter of 2026, accelerating from 2.2 per cent in the previous quarter and exceeding market expectations, according to an advance estimate released by the US Bureau of Economic Analysis (BEA) on Thursday. “Real gross domestic product (GDP) increased at an annual rate of 3.4 percent in the third quarter of 2026 (July, August, and September), according to the advance estimate released today by the U.S. Bureau of Economic Analysis,” the release stated.

The BEA said investment, consumer spending and government expenditure contributed to the expansion. However, lower exports and higher imports partly offset the increase. “The contributors to the increase in real GDP in the third quarter were increases in investment, consumer spending, and government spending that were partly offset by a decrease in exports. Imports, which are a subtraction in the calculation of GDP, increased,” it said.

The economy grew faster during the quarter mainly because of an acceleration in investment and a return to growth in government spending. These gains were partly offset by a decline in exports, while imports increased at a faster rate than in the previous quarter. Investment growth was led by private inventories and equipment. Within equipment, information-processing equipment - mainly computers and peripheral equipment - made the largest contribution.

Consumer spending increased across both services and goods. The rise in services was led by healthcare, food services and accommodation, while spending on goods was supported mainly by prescription drugs. A measure of underlying private domestic demand also remained strong. Real final sales to private domestic purchasers—which includes consumer spending and private fixed investment - increased 4.9 per cent in the third quarter, compared with 4.6 per cent in the previous three months.

Price pressures measured within the GDP report moderated during the quarter. The price index for gross domestic purchases increased 3 per cent, compared with 5.6 per cent in the second quarter. The personal consumption expenditure price index increased at an annualised rate of 2.1 per cent during the quarter, slowing from 5 per cent in the previous quarter. Excluding food and energy, the PCE price index rose 2.5 per cent, compared with 3.3 per cent in the second quarter. (ANI)