U.S. gross domestic product (GDP) expanded at a 3.4% annual pace in the third quarter, U.S. Department of Commerce data showed, while separate September figures reflected continuing affordability pressure before the Nov. 3 midterms.
The latest growth rate topped the 2.2% annual pace from April-June. GDP broadly measures economic activity. NPR reported that consumer spending and investment in artificial intelligence were major contributors, with technology companies putting money into data centers and AI development.
The spending gains were uneven. NPR reported that higher-income Americans led part of the increase and had greater capacity to absorb persistent price rises, while lower-income households struggled more. Wage growth had also fallen behind inflation, squeezing many Americans, the outlet said.
Commerce Department figures for September showed prices up 3.6% from a year earlier. The personal saving rate was 3.8%, down from 4.1% in August. NPR said the price increase exceeded the Federal Reserve’s 2% target and that the Fed closely tracks the department’s inflation measure when setting benchmark rates.
NPR also described public unease about the cost of everyday necessities and higher gasoline expenses tied to the U.S. conflict with Iran, even as consumer spending continued to rise.
Siri Steven, a resale-store manager in Decorah, Iowa, told NPR that she and her husband had delayed repairs to their more than 130-year-old home and were living paycheck to paycheck. “We barely go out to eat now,” she said.
Mark Zandi, chief economist at Moody’s Analytics, told NPR that growth felt “very, very fragile.” He pointed to Trump administration tariffs and the U.S. war against Iran as pressures businesses and consumers had to navigate.
The Federal Reserve held interest rates steady Wednesday. NPR reported that the September price reading could strengthen the case for a rate increase at the Fed’s December meeting.
