US GDP Growth Accelerates to 3.4% in Third Quarter, Topping Forecasts

U.S. real gross domestic product grew at a 3.4% annual rate in the third quarter of 2026, the Commerce Department said in its advance estimate released Oct. 29, beating economists' forecasts of 3.2% and the Atlanta Fed's GDPNow estimate of 3.3%. The reading marked an acceleration from 2.2% growth in the second quarter and was the fastest pace since the third quarter of 2025. The department attributed the pickup primarily to accelerated investment and an upturn in government spending, partly offset by a decline in exports. The report landed a day after Federal Reserve Chair Kevin Warsh described economic activity as expanding at a "strong pace," citing resilient domestic spending and robust capital investment. Separate data released Oct. 29 showed PCE inflation rose to 3.6% year-over-year in September from 3.4% in August. Most traders expect a quarter-point rate increase in December, which would lift the federal funds rate to a 4% to 4.25% range, per CME FedWatch.