The Bureau of Economic Analysis announced today that seasonally adjusted U.S. real GDP grew at a 3.4% annual rate in the third quarter. That is a little above the historical average growth of 3.1% and better than the numbers we’d been seeing over the last three quarters.
Quarterly real GDP growth at an annual rate, 1947:Q2-2026:Q3, with the historical average since 1947 (3.1%) in blue. Calculated as 400 times the difference in the natural log of real GDP from the previous quarter.
Today’s GDP report brings the Econbrowser recession indicator index down to 3.5%, a little more favorable reading than the previous two quarters.
GDP-based recession indicator index. The plotted value for each date is based solely on the GDP numbers that were publicly available as of one quarter after the indicated date, with 2026:Q2 the last date shown on the graph. Shaded regions represent the NBER’s dates for recessions, which dates were not used in any way in constructing the index.
Gangbuster AI investment keeps making a big contribution. But since much of that spending was on imported goods, the net contribution to GDP was more modest. Residential fixed investment, which will bear the brunt of any Fed tightening, continues to look weak. The big difference from the previous quarter came from increases in inventories, which represent newly produced goods that were not sold.
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