The Bureau of Economic Analysis (BEA) said its advance estimate showed U.S. gross domestic product (GDP) grew 3.4% at an annualized rate in the third quarter, as spending and investment helped offset falling exports.
The pace exceeded the 2.2% annualized rate in the second quarter. Output increased 0.8% from one quarter to the next; the annualized figure expresses that quarterly change at a yearly pace. EconoTimes previously covered the third-quarter GDP estimate.
Consumer spending rose at a 3.8% annualized rate, with gains in goods and services. Investment growth primarily reflected private inventory investment and equipment. Among equipment types, products used to process information, including computers and peripherals, recorded the largest increase. The BEA release did not provide a separate figure for investment tied specifically to artificial intelligence. Government spending also contributed to growth. Exports fell, while imports increased and reduced the GDP calculation.
Separate BEA data showed the personal consumption expenditures (PCE) price index rose 0.5% in September from August and 3.6% from a year earlier. The core index, which excludes food and energy, increased 0.3% for the month and 3.1% over 12 months. For the third quarter, headline PCE prices rose at a 2.1% annualized rate, down from 5% in the second quarter. Core prices rose 2.5%, compared with 3.3% in the prior quarter. The monthly, year-over-year and quarterly readings cover different periods.
The Federal Reserve held its federal funds target range at 3.75% to 4% on Wednesday, Oct. 28. The vote was 10-2, with two members favoring a quarter-point increase. The Federal Open Market Committee said economic activity was “expanding at a strong pace.”
The BEA’s advance estimate may be revised. The agency is scheduled to release its second GDP estimate and corporate profits data Nov. 25 at 8:30 a.m. EST.
