US Economy Grew 3.4% in the Third Quarter, Fed's Favorite Inflation Gauge Matches Forecasts (UPDATED)

Key takeaways

• Economic growth and inflation are solid, keeping the
  Fed

  The Federal Reserve — the US central bank that influences interest rates and money conditions.

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  ’s rate‑cut timeline uncertain and pressuring tech stocks.
• GDP growth 3.4%
  YoY

  Year over year — compared with the same period last year.

• Consumer spending 3.8%
  YoY

  Year over year — compared with the same period last year.

• PCE

  Personal Consumption Expenditures price index — the inflation gauge the Fed watches closely; related to, but not the same as, CPI.

  inflation 3.6%
  YoY

  Year over year — compared with the same period last year.

What happened

The U.S. economy expanded at a 3.4% annualized rate in Q3, beating the 3.2% forecast and up from 2.2% in Q2. Real consumer spending grew 3.8% year‑over‑year, unchanged from Q2. The Federal Reserve’s preferred inflation gauge, the personal consumption expenditures price index, rose 3.6% in September, matching expectations and up from 3.4% in August. The

Why it matters

The stronger growth signals a robust economy that could keep the

Short-term and longer-term

Short-term. For the next few days, watch how equity futures respond to the

Longer-term. Over the coming months, the solid growth and steady inflation suggest the