The Economy Grew 3.4% Last Quarter. So Why Are Family Budgets Still Tight? What Thursday's GDP and Inflation Reports Mean for You
America's economy grew faster than expected in the third quarter, powered by business investment and consumer spending. But September's PCE inflation report shows prices rising 3.6% from a year ago, after-inflation income slipping and the saving rate falling to 3.8%.
By Clara Hughes
The federal government delivered two major economic reports on Thursday morning, October 29, and they tell two different stories about the same economy. The first is a story of strength. The Bureau of Economic Analysis (BEA) reported that real gross domestic product, the broadest measure of the nation's output, grew at an annual rate of 3.4% in the third quarter of 2026, according to its advance estimate. That is up from 2.2% in the second quarter. The second is a story of pressure. In a separate release the same morning, BEA reported that the personal consumption expenditures (PCE) price index, the Federal Reserve's preferred inflation gauge, rose 0.5% in September and 3.6% from a year earlier. Both are true. And for families, the second number may matter more than the first. The growth story: America is building The BEA said the third-quarter increase in real GDP reflected increases in investment, consumer spending and government spending. Within investment, the agency pointed to inventories and information processing equipment. Within consumer spending, the leading contributors were