Real GDP grew at 3.4% annual rate in third quarter, BEA advance estimate shows

The U.S. economy's real gross domestic product rose at a seasonally adjusted annual rate of 3.4% in the third quarter of 2026, covering July, August and September, the U.S. Bureau of Economic Analysis said in its advance estimate released at 8:30 a.m. EDT Thursday, Oct. 29. Real GDP had grown at a 2.2% rate in the second quarter, the agency said. At a quarterly rate, the third-quarter increase was 0.8%.¹

In current dollars, GDP grew at an annual rate of 5.6% in the quarter, according to the release.¹

The Associated Press reported that economists had expected 3% growth, citing a survey of forecasters by the data firm FactSet.²

What drove the change

BEA said the third-quarter increase came from gains in investment, consumer spending and government spending, partly offset by a drop in exports. Imports, which are subtracted when GDP is calculated, rose. The agency attributed most of the pickup from the second quarter to faster growth in investment and to government spending turning higher, with exports turning lower working in the other direction. Imports grew more than in the second quarter.¹

The agency's contributions table breaks the 3.4% rate into percentage points, at annual rates:³

• Gross private domestic investment: 3.27 points, including 1.61 points from the change in private inventories.
• Consumer spending (personal consumption expenditures): 2.52 points.
• Government consumption and investment: 0.90 point.
• Exports: minus 0.68 point.
• Imports: minus 2.64 points.

According to BEA's technical notes, the investment increase mainly reflected private inventory investment, led by wholesale trade and manufacturing, and equipment, led by information processing equipment such as computers and peripherals. Within consumer spending, health care and food services and accommodations led the gain in services, and other nondurable goods, mainly prescription drugs, led the gain in goods.¹

Federal spending more than accounted for the government increase, led by nondefense consumption. BEA said that pattern mainly reflected smaller sales of crude oil from the Strategic Petroleum Reserve than in the second quarter; such sales are deducted from government consumption, and the agency said they have no direct effect on GDP because the oil sold shows up in other components. The drop in exports was mainly in goods, led by petroleum and related products, and capital goods other than automotive were the largest contributor to imports.¹

Real final sales to private domestic purchasers, the sum of consumer spending and private fixed investment, rose at a 4.9% rate, compared with 4.6% in the second quarter.¹

Prices

The personal consumption expenditures price index rose at a 2.1% annual rate in the third quarter, compared with 5.0% in the second quarter. Excluding food and energy, the PCE price index rose 2.5%, compared with 3.3%. The price index for gross domestic purchases rose 3.0%, compared with 5.6% in the second quarter.¹

What the records do not show

• The figures are BEA's first estimate for the quarter; the release says they will be superseded by the second estimate, scheduled for Nov. 25 at 8:30 a.m. EST.¹
• BEA's comparisons table shows no third-quarter figure yet for gross domestic income, the income-side measure of the economy.³
• The release reports growth rates; it does not state the dollar level of GDP for the quarter.¹
• The FactSet forecast is as reported by the Associated Press; SignalData did not see the survey itself.²