US GDP Growth Rate Tops Forecasts

2026-10-29 12:33 By Joana Taborda 1 min. read

The US economy expanded an annualized 3.4% in Q3 2026, the most in a year, compared to a 2.2% rise in Q2 and above expectations of 3.2%.

The largest upward contribution came from private domestic investment (19.4% vs 4.6% in Q2) amid strong investment in AI.

Equipment soared 20.9% (vs 13.4%), particularly computers and peripheral equipment; intellectual property products rose 8.4% (vs 9.2%) and structures increased 5.4% (vs 0.1%).

Personal consumption remained robust (3.8%, the same as in Q2), led by both goods (3% vs 4.5%) and services (4.1% vs 3.4%), particularly spending on hospitals and outpatient services and prescription drugs.

The government sector jumped 5.3% (vs -0.1%), led by sales of crude oil from the Strategic Reserve.

Private inventories also added 1.61 pp to the growth.

In contrast, residential investment moved back to contraction after a brief gain in Q2 (-3.3% vs 2.8%).

Net trade also weighed down as exports shrank 5.7% (vs +5%) and imports increased 19.7% (vs 12.6%).



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US GDP Growth Rate Tops Forecasts
The US economy expanded an annualized 3.4% in Q3 2026, the most in a year, compared to a 2.2% rise in Q2 and above expectations of 3.2%. The largest upward contribution came from private domestic investment (19.4% vs 4.6% in Q2) amid strong investment in AI. Equipment soared 20.9% (vs 13.4%), particularly computers and peripheral equipment; intellectual property products rose 8.4% (vs 9.2%) and structures increased 5.4% (vs 0.1%). Personal consumption remained robust (3.8%, the same as in Q2), led by both goods (3% vs 4.5%) and services (4.1% vs 3.4%), particularly spending on hospitals and outpatient services and prescription drugs. The government sector jumped 5.3% (vs -0.1%), led by sales of crude oil from the Strategic Reserve. Private inventories also added 1.61 pp to the growth. In contrast, residential investment moved back to contraction after a brief gain in Q2 (-3.3% vs 2.8%). Net trade also weighed down as exports shrank 5.7% (vs +5%) and imports increased 19.7% (vs 12.6%).
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The US economy expanded at an annualized rate of 2.2% in Q2 2026, revised up by 0.7 percentage point from the 2nd estimate, following an upwardly revised 2.5% growth in Q1. The stronger estimate reflected upward revisions to investment, consumer spending, and government spending. The upward revision to investment reflected stronger private inventory and fixed investment, with nonresidential structures (particularly commercial and healthcare construction, led by data centers) providing the largest contribution. From an industry perspective, the growth was driven by increases in real value added across private services-producing industries (2.5%), private goods-producing industries (2.3%), and government (less than 0.1%). The largest contributions came from real estate and rental and leasing, information, durable goods manufacturing, and finance and insurance. These gains were partly offset by declines in transportation and warehousing, retail trade, and nondurable goods manufacturing.
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