US economy sees 2.8% growth as consumer spends rise

The

US economy

expanded at a robust pace in the third quarter as household purchases accelerated ahead of the election and the federal govt ramped up defence spending. Inflation-adjusted GDP increased at 2.8% annualised after rising 3% in the previous quarter, according to govt’s initial estimate.
Consumer spending

, which comprises the largest share of economic activity, advanced 3.7%, the most since early 2023. The acceleration was led by broad increases across goods, including autos, household furnishings and recreational items.

At the same time, a closely watched measure of underlying

inflation

rose 2.2%, roughly in line with the

Federal Reserve

‘s target, figures from the Bureau of Economic Analysis showed.

The report card for the world’s largest economy illustrates solid momentum in domestic demand as the Fed began unwinding its tightest monetary policy program in decades. It’s also the last before Election Day, as American voters size up the general snapshot of US economic activity against their own financial situation, which has been beset in recent years by a high cost of living.