The U.S. economy expanded at a 3.4% annual rate during the third quarter of 2026, the Commerce Department reported Thursday.
The growth in gross domestic product topped economists’ expectations and was the fastest in a year, boosted by massive investments in artificial intelligence infrastructure and an American consumer who keeps spending despite underlying concerns about soaring fuel prices and sticky inflation. GDP growth was 2.2% in the prior quarter.
Consumer spending grew at a 3.8% rate from July through September, matching the solid growth from the previous quarter. Spending rose in numerous goods sectors, including automobiles, furniture and apparel, as well as in services sectors including healthcare, food services and accommodations.
Business investment rose sharply as AI spending continued to provide a significant boost to growth. Private nonresidential investment grew at a 12.7% pace, the fastest since 2020. Investment in computers and related equipment surged 37.4%, while spending on software rose 9.6%.
Residential investment lagged, falling by 3.3%, as investment in data centers squeezed out home building. Net exports also weighed on growth, as imports of AI-related goods such as computer chips surged.
Andrew Husby, a senior US economist at BNP Paribas, said the latest data points toward solid growth overall. “The print shows an economy that’s performing pretty well under the surface,” he said, per Bloomberg. “The numbers also reinforce that the economy is supported by the AI buildout and the accompanying tailwinds, though it’s not the only thing driving economic growth.”
Speaking to reporters en route to a rally in South Carolina, President Trump highlighted the quarterly numbers. “The country is doing unbelievably well,” he said.