By — Paul Wiseman, Associated Press Paul Wiseman, Associated Press Leave your feedback Share Copy URL https://www.pbs.org/newshour/economy/u-s-economy-grows-at-brisk-3-4-pace-in-third-quarter-on-strong-consumer-spending-and-ai-investment Email Facebook Twitter LinkedIn Pinterest Tumblr Share on Facebook Share on Twitter U.S. economy grows at brisk 3.4% pace in third quarter on strong consumer spending and AI investment Economy Oct 29, 2026 11:48 AM EDT WASHINGTON (AP) — The U.S. economy grew at a healthy 3.4% annual pace from July through September, accelerating from the second quarter on strong consumer spending and investment in artificial intelligence. The expansion in third-quarter gross domestic product – the nation's output of goods and services – was faster than the 2.2% growth registered from April through June, the Commerce Department said Thursday. Consumer spending rose at a brisk 3.8% clip in the third quarter, and business investment was up sharply, reflecting the AI boom. READ MORE: Consumer concerns grow as retailers adopt AI-assisted pricing tools The American economy – by far, the world's biggest – has proven resilient in the face of higher energy prices caused by the fighting with Iran. Educate your inbox Subscribe to…
U.S. economy grows at brisk 3.4% pace in third quarter on strong consumer spending and AI investment
In short
The Commerce Department's initial estimate showed broad acceleration from the second quarter's 2.2% pace, outpacing the 3% forecast from FactSet economists. Vigorous consumer spending at a 3.8% rate combined with heavy commercial outlays in artificial intelligence to drive the expansion. In contrast, the residential sector remained challenged by high mortgage rates, suffering its sixth decline over the past seven quarters.
Key points
- Technological capital expenditures in software, hardware, and research served as a primar…: Technological capital expenditures in software, hardware, and research served as a primary catalyst for the nation's economic momentum.
- Household consumption remained notably robust despite consumer pressures caused by higher…: Household consumption remained notably robust despite consumer pressures caused by higher energy prices linked to conflict with Iran.
- The housing market remains a persistent drag on broader growth, having declined in six of…: The housing market remains a persistent drag on broader growth, having declined in six of the last seven quarters.