US economy grows 3.4% in third quarter as inflation accelerates

Summarised from 2 outlets · Updated 29 Oct, 15:46 · Archive

US gross domestic product grew 3.4% in the third quarter, beating expectations, whilst inflation picked up in September.

The US economy expanded at an annualized rate of 3.4% in the third quarter, according to Commerce Department data released Thursday. This exceeded economists' forecast of 3.1% and represented a sharp acceleration from the second quarter's 2.2% growth. Investments, consumer spending and government spending were the largest contributors to the growth.

Inflation accelerated in September, with the personal consumption expenditures price index rising 0.5% for the month—the largest monthly increase since March—and 3.6% on an annual basis. Core inflation, which excludes food and energy, reached 3.1%. Both figures remained above the Federal Reserve's 2% target, though the annual core rate was in line with expectations.

The Federal Reserve held its benchmark interest rate in a range between 3.75% and 4% on Wednesday. Despite the elevated inflation readings, Fed Chairman Kevin Warsh said the central bank would evaluate incoming data before deciding on its next move. 'The period right in front of us is information rich,' he said. 'There is a lot that's happening in the world. My colleagues and I are keen to take notice of it.'

How it is being reported

• Inflation picks up in September; third quarter GDP beats expectationsCore inflation rose by 3.1% in September while gross domestic product for the third quarter grew by 3.4%, the Bureau of Economic Analysis reports.UPI · 29 Oct, 15:25
• Third-quarter U.S. GDP increases a better-than-expected 3.4% as September inflation acceleratesThe personal consumption expenditures price index was projected to increase 0.5% in September for an annual rate of 3.7%, according to the Dow Jones consensus.CNBC · 29 Oct, 12:42

In this story: United States · Federal Reserve · Kevin Warsh · Commerce Department

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