US economy grows at 3.4% annualised rate as investment rises

The US economy grew at an annualised rate of 3.4% from July to September 2026, up from 2.2% in the preceding quarter, according to the Bureau of Economic Analysis’s first estimate, released on 29 October. The annualised figure describes the pace if one quarter’s growth continued for a year; output actually rose 0.8% over the three months.

The bureau said stronger investment and an upturn in government spending were the main reasons growth accelerated. Investment included both equipment purchases, led by computers and related devices, and the rebuilding of business inventories. Reuters calculated that inventories added 1.61 percentage points to GDP growth, while increased imports subtracted 2.64 points. Imports are deducted because they represent production outside the US.

Demand excluding inventories was strong too. Consumer spending and private fixed investment together grew at a 4.9% annualised rate, compared with 4.6% in the second quarter. The Associated Press reported that consumer spending rose 3.8% and business investment excluding housing climbed 12.7%. Housing investment, by contrast, fell 3.3%.

The White House portrayed the report as evidence that President Donald Trump’s tax, regulatory, energy and trade policies are driving an investment boom. Its description of business investment growth as ‘almost 13%’ is consistent with the 12.7% figure, but the GDP figures measure growth and its components, not how much of that growth was caused by government policy.

The estimate puts a first official figure on the third-quarter growth anticipated in a column Trump shared earlier in October. It may yet be revised: the bureau’s second estimate is due on 25 November. Reuters reported that inflation-adjusted consumer spending was flat in September, leaving a weaker starting point for the fourth quarter.