US GDP grew 3.4% in Q3 as September inflation accelerated to 3.6%
What's next: Hotter price growth may keep pressure on the Fed after it held rates at 3.75% to 4% on Wednesday.
The US economy expanded at a stronger-than-expected 3.4% annualized pace in the third quarter, while the Federal Reserve’s preferred inflation gauge sped up in September. Commerce Department data released Thursday showed the personal consumption expenditures price index rose 0.5% for the month and 3.6% from a year earlier, still well above the Fed’s 2% target. Core PCE, which strips out food and energy, rose 0.3% on the month and 3.1% annually. Consumer spending increased 0.5% in September, and third-quarter growth was supported by household spending and a surge in investment tied to AI build-outs such as data centers and equipment. The reports landed a day after the Fed left its benchmark rate unchanged at 3.75% to 4%.