Economy

Real GDP Growth Accelerates to 3.4% in Third Quarter

The Tip Desk · October 30, 2026 · 2 min read

Investment and government spending picked up as exports fell, lifting the annualized pace from 2.2% in the second quarter.

Real gross domestic product increased at an annual rate of 3.4 percent in the third quarter of 2026, according to the advance estimate from the U.S. Bureau of Economic Analysis, after a 2.2 percent rise in the second quarter.

The acceleration primarily reflected an acceleration in investment and an upturn in government spending, partly offset by a downturn in exports. Imports, which are subtracted in the GDP calculation, increased more in the third quarter than in the second.

Investment rose mainly through private inventory investment and equipment. Wholesale trade and manufacturing, both led by nondurable goods industries, accounted for the largest contributions to the inventory increase. Within equipment, information processing equipment, mainly computers and peripheral equipment, led the gain.

Consumer spending rose in both services and goods. Health care, mainly hospitals and outpatient services, and food services and accommodations, mainly purchased meals and beverages, led services. Other nondurable goods, mainly prescription drugs, led the goods increase.

Government spending rose, more than accounted for by federal spending, led by nondefense consumption expenditures. The pattern of nondefense spending primarily reflected sales of crude oil from the Strategic Petroleum Reserve; sales were less than in the second quarter, resulting in an increase in consumption expenditures. Because the oil sold by the government is reflected as an increase in other components of GDP, there is no direct effect on GDP.

Exports fell, primarily in goods led by petroleum and related products. The largest contributor to imports was capital goods, except automotive. Real final sales to private domestic purchasers, the sum of consumer spending and gross private fixed investment, increased 4.9 percent, compared with an increase of 4.6 percent in the second quarter.

The price index for gross domestic purchases increased 3.0 percent, compared with an increase of 5.6 percent in the second quarter. The personal consumption expenditures price index increased 2.1 percent, compared with an increase of 5.0 percent, and the PCE price index excluding food and energy increased 2.5 percent, compared with an increase of 3.3 percent.

See [the BEA release](https://www.bea.gov/news/2026/gdp-advance-estimate-3rd-quarter-2026) for the full advance estimate.