US GDP accelerates to 3.4% in the third quarter

The US economy grew at a robust pace in the third quarter, driven by investment, consumer spending, and government spending.

Gross domestic product increased at a 3.4% annualized rate, according to an initial estimate released Thursday by the US Bureau of Economic Analysis, beating economists’ expectations of 3.1% and marking an acceleration from the second quarter’s 2.2% growth.

Read more: What is GDP, and why is it important to economists and investors?

The artificial intelligence build-out was the main engine, with business investment surging 12.7%. Consumer spending grew 3.8%, matching the rate in Q2 and the strongest since the end of 2024. The Conference Board reported this week that consumer confidence is improving, despite sticky inflation and higher gas prices.

Third quarter growth was partly offset by a decrease in exports. Imports, which are subtracted in the calculation of GDP, increased.

Liz Ann Sonders, chief investment strategist at Charles Schwab, wrote on X that it was “another strong Q for capex. But she pointed out that growth “continues to be somewhat offset by a drag from net exports,” noting that the AI build-out “is very import-driven.”

Heather Long, chief economist at Navy Federal Credit Union, wrote on X, “Consumption was still strong. But business investment is turbocharging the U.S. economy.”

The release is the final report on the economy ahead of next week’s midterm elections, as President Trump and Republicans deliver their closing message.

“‘MAJOR BOOST FOR THE ECONOMY’: The U.S. economy grew at an annual rate of 3.4% in the third quarter — blowing away expectations again,” the White House posted on X Thursday.

This story will be updated.

Molly Moorhead is economics editor at Yahoo Finance.