U.S. economy grows 3.4% in third quarter on consumer spending and AI investment
Third-quarter GDP growth accelerated to 3.4%, driven by strong consumer spending and a surge in AI-related business investment.
The U.S. economy expanded at a 3.4% annual rate in the third quarter, up from 2.2% growth in the second quarter, according to the Commerce Department reported by PBS NewsHour.
Consumer spending increased by 3.8% during the quarter, contributing significantly to the overall economic growth.
Business investment excluding housing rose sharply by 12.7%, with notable gains in information processing equipment (up 37.4%), software (up 9.6%), and research and development (up 7.5%), reflecting the ongoing AI boom.
Despite the overall growth, housing investment declined by 3.3%, marking the sixth drop in seven quarters, due to high mortgage rates.
Economists had forecasted a 3% growth rate for the quarter, making the actual 3.4% expansion a stronger-than-expected performance, as noted by MarketWatch.
The U.S. economy's resilience is notable amid challenges such as higher energy prices linked to geopolitical tensions with Iran.
- PBS NewsHour Economy: U.S. economy grows at brisk 3.4% pace in third quarter on strong consumer spending and AI investment
- MarketWatch Top Stories: U.S. economy grows at fastest pace in almost three years, third-quarter GDP shows
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