Real GDP Grew 3.4% During Q3 in Advanced Estimate
Real GDP increased at an annual rate of 3.4% in the third quarter of 2026, up from a 2.2% rise in the second quarter and above consensus expectations. The increase in GDP during the third quarter mostly reflected increases in consumer spending, investment and government spending, which were partially offset by reductions in exports.
Consumer spending grew at an annual rate of 3.8%, consistent with the 3.8% increase in the second quarter, with spending on services (up 4.1%) driving the acceleration, while spending on goods rose 3.0%, slowing from a 4.5% jump the prior quarter. Consumer spending on durable goods advanced 2.3% after surging 7.4% in the previous quarter, while spending on nondurable goods climbed 3.4% after increasing 3.1% in the second quarter. The slowdown in durable goods consumer spending was driven primarily by recreational goods and vehicles and motor vehicles and parts. Meanwhile, for consumer spending on nondurable goods, increases in food and beverages, clothing and footwear and other nondurable goods were offset by drops in spending on gasoline and other energy goods. Within services, spending increases were widespread, with health care being the largest contributor to the gain.
Investment soared 19.4% at an annual rate in the third quarter, after rising 4.6% in the second quarter. The improvement was driven primarily by surges in information processing equipment and industrial equipment investments of 37.4% and 24.7%, respectively. Meanwhile, business spending on structures climbed 5.4%, up from the 0.1% uptick in the second quarter. Exports fell 5.7% in the third quarter, with the decline primarily concentrated in goods exports (down 7.4%). At the same time, imports jumped 19.7% in the third quarter, with the increase also concentrated in goods (up 26.4%). The jump in federal government spending (up 15.8%) was driven by both defense (up 11.7%) and nondefense spending (up 22.2%). Meanwhile, state and local government spending dipped 0.1% in the third quarter, down from the 1.2% rise in the prior quarter.
