Real GDP (Q3-2026, advance estimate)  

Growth accelerates in Q3, led by consumer spending and business investment  

• The U.S. economy expanded by 3.4% quarter-on-quarter (q/q, annualized) in the third quarter, accelerating from 2.2% in Q2. The reading was in line with consensus.  
• Consumer spending rose by a healthy 3.8% q/q, matching Q2's gain. Goods and services spending recorded solid gains, rising 3.0% and 4.1% respectively. 
• Business investment was also strong, with outlays surging by 12.7% q/q. Outside of the pandemic, this was strongest quarterly gain since 2011.  Gains were widespread, with equipment spending (+20.9%), intellectual property products (+8.4%) and structures (+5.4%) all higher in the quarter. Meanwhile, residential investment (-3.3%) declined, reflecting weaker sales and construction activity.  
• Government spending (+5.3%) rose sharply, amid a sharp increase in federal spending on both defense (+11.7%) and non-defense (+22.2%).  
• International trade shaved 3.3 percentage points (pp) from growth in Q3, as imports (+19.7%) surged while exports (-5.7%) more than reversed Q2's gain. Import growth was entirely concentrated in goods, while services were marginally lower. Offsetting some of the drag from trade, inventory investment added 1.6pp to growth. 
• Final sales to private domestic purchasers, a better gauge of underlying demand as it includes only household consumption and fixed investment, rose by a very healthy 4.9%, following a gain of 4.6% in Q2.  
• Core PCE inflation rose 2.5% q/q (annualized), a deceleration from Q2's 3.3%. 

 

Key Implications

• The U.S. economy delivered a very healthy third quarter, expanding at its fastest pace in a year on solid consumer spending and business investment. AI-related capital expenditures remained a key growth driver, reflecting an acceleration in data center construction and a pick-up in complementary infrastructure, including power and electricity. However, spending on industrial and other equipment as well as oil & gas infrastructure also recorded solid gains, supporting the view that the investment boom isn’t only an AI story.  
• Elevated energy prices and higher interest rates continue to pose near-term headwinds for the outlook. But with financial conditions still broadly accommodative, AI-related investment showing no signs of slowing, and consumer spending entering Q4 with decent momentum, we expect growth to remain near 2% through year-end. 
   

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