US economy grew at brisk 3.4% pace in third quarter lifted by consumer spending

Driven by strong consumer spending and a surge in artificial intelligence investments, the U.S. economy expanded at a healthy 3.4% annualized pace between July and September, accelerating from the second quarter.

Figures released Thursday by the Commerce Department show that third-quarter gross domestic product—measuring total output across goods and services—outpaced the 2.2% growth recorded from April through June. Household spending increased at a swift 3.8% rate during the period, while business investment climbed sharply amid the boom in AI technology.

The performance demonstrates the ongoing resilience of the world’s largest economy, despite higher energy costs brought on by fighting with Iran. Growth also surpassed expectations, topping the 3% expansion projected by forecasters in a survey by data firm FactSet.

Commercial investment, excluding housing, rose 12.7% as growth was lifted by AI spending. Capital outlays on information processing equipment jumped 37.4%, software rose 9.6%, and research and development increased 7.5%. Conversely, residential investment, constrained by high mortgage rates, fell 3.3%, marking its sixth decline in the last seven quarters.

Thursday’s report represents the first of three Commerce Department estimates regarding third-quarter GDP growth.