U.S. economy grows at brisk 3.4% pace in third quarter on strong consumer spending and AI investment
Consumer spending rose at a good clip in the third quarter, and business investment was up sharply, reflecting the AI boom.
The U.S. economy expanded at a robust 3.4% annual rate from July to September, outpacing the 2.2% growth seen in the previous quarter, according to the Commerce Department. This robust growth was driven by a surge in consumer spending and investment in artificial intelligence. Consumer spending surged by an impressive 3.8%, while business investment rose sharply, underscoring the AI-driven boom.
Economists had projected a 3% growth in GDP for the third quarter. The AI investment boom has significantly bolstered U.S. growth, with business investment excluding housing up by 12.7%. Investment in areas such as information processing equipment, software, and research and development also saw significant increases of 37.4%, 9.6%, and 7.5% respectively.
However, housing investment, impacted by high mortgage rates, declined by 3.3% and has fallen for six consecutive quarters. This report marked the first of three estimates of third-quarter GDP growth by the Commerce Department.
Written by urgent.news from PBS NewsHour's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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