US Economy Grows 3.4% in Third Quarter as Core Inflation Moderates

Original summary · What happened

The United States economy expanded at an annualized rate of 3.4% during the third quarter, surpassing consensus expectations of 3.1% and accelerating from the 2.2% pace recorded in the second quarter, according to data issued Thursday by the Commerce Department. Consumer spending demonstrated ongoing momentum by increasing 0.5% in September, slightly trailing projections of 0.6%, while personal income advanced 0.2% against estimates of 0.3%.

Concurrently, inflationary pressures showed mixed momentum across broad and underlying measures. The headline personal consumption expenditures price index increased 0.5% on a seasonally adjusted monthly basis, bringing the annual advance to 3.6%. Meanwhile, core PCE, which excludes volatile food and energy categories, gained 0.3% over the prior month and 3.1% year over year, aligning with Dow Jones consensus expectations. The economic metrics arrived one day after the Federal Reserve opted to maintain its benchmark target range between 3.75% and 4.00%.