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Economy & Your Money

US economy grows 3.4% in third quarter, but inflation climbs to 3.6%

Growth beat forecasts and the Fed held interest rates steady Wednesday, with midterm elections less than a week away.

10 news outlets reported this
Liberal4 outletsCenter4 outletsConservative2 outlets
Published 4 min readMoney and daily life
Overview

The US economy grew at a 3.4% annual rate in the third quarter, according to a government report released Thursday, Oct. 29. That beat forecasts and topped the 2.2% pace of the second quarter. Consumer spending rose 3.8%, and outlets point to business investment tied to artificial intelligence as a driver.

also picked up. The personal consumption expenditures price index, the 's preferred gauge, rose 3.6% in September from a year earlier, up from 3.4% in August. Prices rose 0.5% over the month.

Core inflation, which leaves out food and energy, was 3.1%. Outlets link higher prices to energy costs from the conflict with Iran. A day earlier, the Fed, led by Chairman Kevin Warsh, held its benchmark rate at 3.75% to 4%.

The data came less than a week before the elections, and several outlets cite polls showing voters unhappy with the economy and prices. Consensus forecasts cited ranged from 3% to 3.2%, depending on the survey. Outlets differ on which agency issued the report and on whether September's monthly price rise was the largest since March or since May.

Three sides of the story

Liberal4 outlets

The Guardian, CNBC and the Independent report strong growth and rising inflation together. The Guardian and the Independent place both against the approaching midterms. The Guardian cites voter frustration over rising gas and grocery prices and a sharp drop in Trump's approval on the economy.

The Independent says polls show rising inflation has soured most voters, notes Trump campaigned in 2024 on lowering prices, and reports gas near $4.25 a gallon and oil above $100 . The Guardian adds that some economists think AI-driven spending may make growth look stronger than the underlying economy. CNBC reports investment up 19.4%, September energy prices sharply higher and jobless claims at 194,000.

It quotes Chris Rupkey of Fwdbonds on growth powering ahead, and says the data suggests the Fed could have more work to do. The Independent also reports residential investment fell 3.3%. The Guardian says economists expect the Fed to raise rates in December, and the Independent says the Fed will be under pressure to do so.

Center4 outlets

UPI leads with the numbers: 3.4% GDP growth, 3.6% annual PCE inflation, 3.1% core inflation and a 0.5% monthly rise. It says no single month has risen that much since March, which it describes as the Iran war's first full month. It quotes Warsh saying the period ahead is "information rich" and notes the Fed raised its target range in September, the first rise since 2023.

UPI says investment, consumer spending and government spending contributed most to growth, and that growth remains below the 3.9% pace of the third quarter of 2025. It frames the third-quarter figure as a bounce back from the second quarter. The Hill reports that gasoline and energy costs rose sharply while overall inflation edged up.

NewsNation reports the economy has shown resilience despite higher energy prices tied to the fighting with Iran.

Conservative2 outlets

The Washington Examiner presents the GDP report as a sign of underlying strength. It says the figures give the Trump administration a point to cite before the midterms, while noting Trump and Republicans have struggled with weak economic approval because of high inflation. It quotes Chris Zaccarelli of Northlight Asset Management on growth running well above the decades of 2% averages, and Warsh, whom Trump appointed earlier this year, on strong investment.

The Examiner reports consumer sentiment at its second-lowest reading on record and a Harris Poll/Guardian survey in which 61% said the US is in a , then explains how recessions are declared. The Washington Times reports that growth accelerated over the summer and consumers kept spending despite high prices, and says inflation complaints challenge Trump and Republicans ahead of Tuesday's midterms.

Where outlets disagree
  • Which agency issued the third-quarter GDP report
    • UPI: The US Bureau of Economic Analysis reported the GDP figure.
    • Washington Examiner: The Bureau of Labor Statistics reported the preliminary GDP estimate.
  • Since when September's 0.5% monthly PCE rise was the largest
    • CNBC: The monthly increase was the largest since March.
    • UPI: The single-month increase was the largest since March.
    • The Independent (US): The 0.5% monthly rise was the highest figure since May.
Money and daily life

The Guardian reports average gasoline prices above $4 a gallon, about $1 more than a year ago, and says wage gains have at times lagged behind inflation. The Guardian says economists expect the Fed to raise interest rates in December, and the Independent says the Fed will be under pressure to do so. The Guardian notes that higher rates can slow inflation but risk weakening the economy and the job market.

Official statements
All sources: 11 articles from 10 outlets

Liberal (4)

Center (4)

Conservative (3)

Related
Inflation and the CPI

How fast prices rise. In the US it is measured by the consumer price index, published monthly for a basket of goods and services. “Core” inflation leaves out food and energy, whose prices swing the most.

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Federal Reserve (the Fed)

The central bank of the United States. It sets the key interest rate, which moves the rates on loans, mortgages and savings.

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Midterm elections

US elections halfway through a president's four-year term. The whole House, a third of the Senate and many governors are elected. In 2026 Election Day is November 3.

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GDP

Gross domestic product: the value of everything a country produces in a period. When it grows, the economy is expanding. The quarterly growth figure for the US is usually quoted as an annual rate.

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Brent crude and the barrel

Brent is the benchmark price for most of the world's oil, and WTI is the US benchmark. Oil is priced per barrel, about 159 litres.

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Recession

A broad decline in the economy: output falls and unemployment rises. A common rule of thumb is two quarters in a row of shrinking GDP, but in the US the official call comes later from a committee of economists.

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