US Third Quarter GDP Likely Accelerated to 3.2%

The United States Department of Commerce is scheduled to release an advance estimate for third-quarter 2026 GDP on Thursday, with expectations that economic growth accelerated to a 3.2% annualized rate. This expansion was primarily driven by healthy consumer demand and a surge in business investment in software, equipment, and AI infrastructure.

This growth offset headwinds including higher oil prices and a widening goods trade deficit caused by record-high imports of AI-linked capital goods. Residential investment contracted during the period, hampered by rising mortgage rates, labor shortages, and import tariffs. Despite the acceleration, consumer sentiment remains low, coinciding with record-low approval ratings for President Donald Trump.

The Federal Reserve System maintained benchmark interest rates between 3.75% and 4.00% due to elevated inflation. Because the economy expanded faster than the central bank's 2% non-inflationary target, a stronger-than-expected GDP reading may signal sticky price pressures, potentially increasing the likelihood of near-term interest rate hikes.