The Bureau of Economic Analysis reported Thursday that U.S. real GDP grew at a 3.4% annualized rate in July–September 2026, while its September personal consumption expenditures price index rose 3.6% from a year earlier.
What the government reported
The Bureau of Economic Analysis released its advance estimate on October 29. Real gross domestic product—the inflation-adjusted value of goods and services produced in the United States—grew 3.4% at an annualized rate in the third quarter, following 2.2% in the second quarter. An annualized quarterly figure expresses what the quarter’s growth would amount to if that rate continued for a full year; it is not the economy’s year-over-year growth rate.
Where growth came from
BEA identified increased investment, consumer spending and government spending as positive contributors. Falling exports partly offset those gains. Imports increased; under the GDP accounting formula, imports are subtracted to avoid counting foreign-produced goods as U.S. output. The agency emphasized that this is an advance estimate, subject to revision as more complete information becomes available.
Inflation remains elevated
In a separate September personal-income-and-outlays report, BEA said headline PCE prices increased 0.5% from August and 3.6% from September 2025. The annual rate had been 3.4% in August. The PCE index excluding food and energy increased 3.1% from a year earlier. These are price-growth rates, not the price level itself: slower inflation would not automatically mean prices return to earlier levels.
What households experienced
September personal income increased 0.2%, nominal consumer spending increased 0.5%, and real disposable personal income declined 0.3% on the month according to BEA. National averages cannot describe each family’s finances; housing, wages, debt and local costs vary considerably. A strong GDP reading can coexist with pressure on household budgets.
Competing interpretations and next steps
Supporters of the growth outlook can point to sustained investment and consumer activity. Those concerned about inflation can point to accelerating headline price growth. Neither number on its own dictates the Federal Reserve’s next move. The Fed held its benchmark rate at 3.75%–4.00% on October 28; coming inflation and jobs reports will be part of the evolving outlook. BEA has scheduled a later revision to the advance GDP estimate.
