US economy grew 3.4% annualized in third quarter, first GDP estimate shows

Mixed · 2The US economy grew at an inflation-adjusted annualized rate of 3.4% in the third quarter, according to a government report released on Thursday 29 October. 1 2 Mixed · 2The figure is an acceleration from 2.2% growth in the second quarter and 2.5% in the first quarter. 1 2 Mixed · 3The Washington Examiner attributes the report to the Bureau of Labor Statistics, while ABC News, Breitbart, The Independent and Just the News attribute it to the Commerce Department, and Anadolu Agency and Just the News name its Bureau of Economic Analysis. The Examiner describes the reading as the first of three estimates for the quarter and says economists had expected 3.2%; Anadolu also cites 3.2%, Breitbart and Just the News (citing CNBC) cite 3.1%, and The Independent cites about 3% from a FactSet survey. 2 3 4

Mixed · 2ABC News says a surge in spending on artificial intelligence, including chips and data centers, has helped lift the economy in recent quarters. Fed Chair Kevin Warsh made a similar point on Wednesday, saying high-tech investment is leading the acceleration. 1 2 Mixed · 2Breitbart and Anadolu Agency report the growth came mainly from investment and a rise in government spending, partly offset by a drop in exports and faster import growth. Breitbart says real final sales to private domestic purchasers rose 4.9%, the fastest since the second quarter of 2021 (Anadolu gives the same 4.9% against 4.6% in the second quarter), consumer spending grew 3.8%, and business investment rose 12.7%, with equipment up 20.4%. 5 3 Left · 1The Independent says AI-related spending lifted investment, with information processing equipment up 37.4%, and that residential investment fell 3.3%, its sixth decline in seven quarters, which it ties to high mortgage rates; Breitbart also reports the 3.3% housing decline. 4

Mixed · 2Anadolu and Breitbart report that quarterly price pressure eased: the personal consumption expenditures price index rose at a 2.1% annual rate (Anadolu: down from 5% in the second quarter) and core PCE at 2.5% (from 3.3%). The Independent says the economy has been resilient despite higher energy costs from the fighting with Iran. 3 4 Left · 1On Wednesday the Federal Reserve held interest rates steady. ABC News reports it had raised rates a quarter point the previous month, its first increase in three years, and that markets put about 85% odds on another quarter-point rise in December. 1 Right · 1Just the News puts the Fed's benchmark rate at 3.75% to 4%, and reports the GDP figure as growth "compared to the same period last year", which differs from the annualized quarterly rate other outlets give. 6

Left · 1Inflation remains high. ABC News reports prices rose 3.7% in September from a year earlier, more than a percentage point above the Fed's 2% target. It also says long-term Treasury yields have jumped, pushing up rates on credit cards and mortgages. 1 Right · 1The Examiner places the data in a political context, with the midterm elections less than a week away. It says the figures give the Trump administration a positive data point, though Republicans have struggled with poor economic approval ratings because of high prices. 2 Right · 1The Examiner also reports that consumer sentiment hit its second-lowest reading on record this month, and that a Harris Poll and Guardian survey found 61% of respondents believe the US is in a recession. 2

Left · 1ABC News adds that hiring has continued to grow at a slower pace and unemployment remains low by historical standards. 1