The U.S. economy expanded at a 3.4% annual rate from July through September, accelerating from 2.2% in the prior quarter, the Bureau of Economic Analysis reported Oct. 29. The figure is an advance estimate and will be revised as more data become available.

Consumer spending rose at a 3.8% pace, while investment and government spending also contributed to growth. The Associated Press reported that business investment related to artificial intelligence was a major feature of the quarter.

BEA said private domestic final sales, which combine consumer spending and private fixed investment, increased at a 4.9% annual rate. The measure is intended to show demand from U.S. households and businesses, apart from inventory shifts and trade.

Investment in information-processing equipment rose sharply, AP reported, as companies expanded purchases of computing hardware. Spending on software and research and development also increased.

Housing was a weaker part of the report. AP reported that residential investment fell 3.3% as high mortgage rates weighed on activity; BEA’s data showed exports also declined while imports increased.

Prices rose more slowly than in the prior quarter according to BEA’s price indexes, but the report is not a household-cost measure. The personal consumption expenditures price index increased 2.1% in the quarter at an annual rate, and the core index rose 2.5%.

The report is the first of three estimates for the quarter. BEA scheduled its second estimate for Nov. 25, and later revisions can change the reported growth rate and the components contributing to it.

A strong national growth figure does not mean every household or industry is doing equally well. The contrast between brisk consumer and technology spending and weak housing investment illustrates how national averages can hide uneven conditions.

Sources: U.S. Bureau of Economic Analysis: Third-quarter 2026 advance GDP estimate | The Associated Press: GDP growth, consumer spending and AI investment