U.S. economic growth accelerated to a 3.4 percent annual rate in the third quarter, driven by robust consumer spending and a massive investment boom in artificial intelligence. Consumer spending grew at 3.8 percent, while business investment surged by 12.7 percent, fueled by hundreds of billions in data center and infrastructure spending. Despite this strong performance, inflation remains elevated at 3.5 percent, with consumer prices driven high by gas prices following geopolitical tensions.
This economic resilience contrasts with public frustration over the high cost of living ahead of midterm elections. The Federal Reserve held interest rates steady, aiming to cool inflation without triggering a recession. The AI investment surge has rippled across sectors, boosting industries from semiconductor manufacturing to paint production, and supporting the housing market indirectly through a wealth effect that encourages spending among high-income households.
Source: New York Times Top Stories · Summarized by HeadlinesBriefing