by Emmitt Barry, Worthy News Washington D.C. Bureau Chief
WASHINGTON (Worthy News) – The U.S. economy expanded at a stronger-than-expected 3.4% annualized rate during the third quarter of 2026, fueled by resilient consumer spending and a surge in business investment, providing President Donald Trump with encouraging economic news ahead of the November midterm elections.
According to the Commerce Department’s Bureau of Economic Analysis (BEA), gross domestic product (GDP) accelerated from 2.2% in the second quarter, exceeding economists’ forecasts of approximately 3.2%.
Consumer spending, which accounts for roughly two-thirds of U.S. economic activity, increased 3.8% during the July-to-September period. Americans continued spending on healthcare, restaurants, hotels, and consumer goods despite persistent inflation and elevated energy prices.
Business investment also strengthened considerably, with nonresidential fixed investment climbing 12.7%. Equipment spending surged 20.9%, driven largely by purchases of computers and information-processing technology associated with the rapid expansion of artificial intelligence.
Inflation Eases as Economic Growth Strengthens
The report also delivered encouraging inflation figures. The Personal Consumption Expenditures (PCE) price index increased at a 2.1% annualized rate during the third quarter, down sharply from 5% in the previous quarter.
Core PCE inflation, which excludes volatile food and energy prices, slowed to 2.5% from 3.3%.
However, separate September figures showed annual inflation reaching 3.6%, underscoring the continuing financial pressure facing American households.
The economy’s underlying strength was particularly evident in private domestic demand, which expanded 4.9%, its strongest performance in five years.
Despite the encouraging growth figures, housing investment declined 3.3%, while rising imports and falling exports weighed on overall economic activity.
The latest numbers offer the Trump administration evidence of continued economic resilience, even as Americans grapple with high borrowing costs, expensive energy, and lingering concerns about affordability.
The Federal Reserve, which held interest rates steady on October 28, faces the challenge of balancing stronger economic growth against inflation that remains above its 2% target.
The Commerce Department will release its revised third-quarter GDP estimate on November 25.
Copyright 1999-2026 Worthy News. This article was originally published on Worthy News and was reproduced with permission.
