The us economy expanded at a robust pace in the third quarter as household purchases accelerated ahead of the election and the federal government ramped up defense spending. Inflation-adjusted GDP increased at 2.8% annualized after rising 3% in the previous quarter, according to government’s initial estimate.
consumer spendingwhich comprises the largest share of economic activity, advanced 3.7%, the most since early 2023. The acceleration was led by broad increases across goods, including autos, household furnishings and recreational items.
At the same time, a closely watched measure of underlying inflation rose 2.2%, roughly in line with the Federal Reserve‘s target, figures from the Bureau of Economic Analysis showed.
The report card for the world’s largest economy illustrates solid momentum in domestic demand as the Fed began unwinding its tightest monetary policy program in decades. It’s also the last before Election Day, as American voters size up the general snapshot of US economic activity against their own financial situation, which has been beset in recent years by a high cost of living.
