U.S. GDP jumps 3.4% in the third quarter as September PCE rises 3.6%

U.S. GDP grew at a 3.4% annualized pace in Q3, while the personal consumption expenditures (PCE) price index rose 3.6% from a year earlier in September.

• Real GDP increased by 3.4% annually following a 2.2% increase in Q2. The 3.4% GDP growth was better than a 3.1% estimate, CNBC reports (1, 2).
• Stronger business investment and spending by consumers and the government supported economic growth, while weaker exports and higher imports weighed on the overall figure (1).
• Computers and related components led the rise in equipment spending, with the BEA grounding that estimate mostly on import data. Capital goods were also the biggest driver of the increase in imports, which are subtracted from GDP, meaning part of that investment boost was offset (1).
• The PCE price index rose 0.5% in September, an acceleration from 0.3% in August, lifting the annual rate to 3.6% from 3.4% (3).
• Core PCE, which excludes food and energy, notched a 0.3% gain in both August and September, recording a 3.1% YoY measurement (3, 4).
• The releases of real GDP and the PCE price index, two of the Federal Reserve's most closely watched indicators of economic output and inflation, respectively, come one day after the Fed held its federal funds target range at 3.75% to 4.00% (5).

Sources & Further Reading

1. "GDP (Advance Estimate), 3rd Quarter 2026." U.S. Bureau of Economic Analysis. October 29, 2026.
2. "Third-quarter U.S. GDP increases a better-than-expected 3.4% as September inflation accelerates." CNBC. October 29, 2026.
3. "Personal Income and Outlays, September 2026." U.S. Bureau of Economic Analysis. October 29, 2026.
4. "What is the Core PCE price index?" U.S. Bureau of Economic Analysis. August 3, 2009.
5. "Fed holds rates steady at 3.75% to 4.00% in a 10-2 vote." StockAnalysis.com. October 28, 2026.