U.S. Third-Quarter GDP Grows 3.4% as Inflation Stays Above the Fed's 2% Target

The U.S. economy grew at a 3.4% annual rate in the third quarter, the Commerce Department reported Thursday, up from 2.2% in the second quarter and above economists' estimates of 3.1% to 3.2%. The same reports showed inflation still above the Federal Reserve's 2% target: the personal consumption expenditures index rose 0.5% in September and 3.6% from a year earlier. Core PCE, which excludes food and energy, was up 3.1% annually. The Fed had voted the previous day to hold its benchmark rate at 3.75% to 4%. AAA put the average price of regular gasoline at about $4.28, down roughly 4.7% from its September peak.

Right-leaning outlets led with the growth beat and inflation. Fox Business stressed that the PCE gauge moved further from the Fed's target, while Daily Mail's headline framed the report as a boost for Trump days before the midterms, citing 3.8% consumer spending, AI-driven business investment and falling gas prices. Daily Mail called the growth the fastest in nearly three years. The New York Times, the only left-leaning outlet in this set, reported the 3.4% pace as the fastest in a year and contrasted it with poor voter views of the economy. CNBC, the alternative source, led with inflation accelerating and noted the Fed's rate hold and its focus on core data. All sides agree on the 3.4% growth and 3.6% inflation figures but differ in emphasis and in the comparison period they cite.