US economy grows at 3.4% annualized pace in advance estimate

The US economy grew at a 3.4% annualized rate in July–September, the Bureau of Economic Analysis said in its advance estimate released on October 29. Gross domestic product, or GDP, measures economic output. An annualized rate shows how fast output would grow over a year if the quarter’s pace continued.

Growth exceeded the forecast in a Reuters poll of economists. Consumer spending maintained its second-quarter growth rate and accounted for more than two-thirds of the economy.

Spending holds up as households save less

Historically low layoffs and moderate hiring helped support spending, the Guardian said. But wage gains had at times fallen behind inflation, and households were also saving less and drawing on accumulated savings to pay for purchases.

Those household finances are distinct from the overall growth figure: spending continued to rise while families put less money aside and used existing savings.

Business investment provides another source of growth

The Guardian also identified business investment in superintelligence (SI) as a source of support. That investment and consumer spending more than offset the impact of higher oil prices linked to the conflict in the Middle East.

Some economists questioned whether growth increasingly driven by SI spending reflected conditions across the wider economy. Investors were also focusing on the rising costs of long-term SI projects, whose eventual payoff remains uncertain.