US Economy Seen Growing 3.2% in Third Quarter as GDP Estimate Looms
Key Facts
The US Bureau of Economic Analysis will release its advance estimate of third-quarter 2026 gross domestic product on October 29 at 8:30 a.m. Eastern time. Analysts surveyed by Bloomberg expect annualized growth of 3.2% for the July-to-September period, Axios reported. That forecast puts the quarter on track for its fastest growth since the third quarter of 2025. The Federal Reserve Bank of Atlanta publishes a separate estimate through its GDPNow tracker, which stood at 3.3% in its latest update on October 28. The actual GDP figure had not been released when the forecasts were published on October 28, so the analyst forecast and Atlanta tracker remain two readings ahead of the official data.
If the figure comes in near the forecast, it would exceed the 2.2% annualized growth in real GDP recorded in the second quarter, according to the Bureau of Economic Analysis’ latest official estimate. The bureau had recorded growth of 2.5% in the first quarter after revising the figure. In the second quarter, the department attributed expansion to consumer spending, investment and exports, while higher imports weighed on GDP under its calculation method. Real final sales to private domestic purchasers, which combine consumer spending and private fixed investment, rose at an annual rate of 4.6%. During the same period, the personal consumption expenditures price index rose 5.0% year over year, setting the backdrop of activity and prices for the new quarter’s reading.
Goldman Sachs economists see consumer spending and business investment tied to artificial intelligence as potential supports for third-quarter growth. They forecast annualized increases of 3.4% in personal consumption expenditures and 10.2% in business fixed investment. But higher investment spending does not necessarily feed fully into GDP, as increased semiconductor imports may reduce its contribution under the accounting measure. That is evident in September’s trade figures: the US goods trade deficit widened by $2.8 billion to $134.9 billion. That was the largest deficit since March 2025. Oxford Economics estimated that net trade would subtract 3.25 percentage points from third-quarter GDP growth, a potential counterweight to support from consumption and business investment.
Durable goods orders rose 1.8% month over month in September to $345.4 billion, following a modest 0.1% increase in August. Transportation equipment led the gain, with orders rising 4.6% to $119.8 billion. Excluding transportation equipment, new orders increased 0.5%, while they rose 2.2% excluding defense orders, according to the US Census Bureau. The figures add an indicator of industrial demand ahead of the GDP estimate, while showing varied performance depending on the category excluded. Meanwhile, the consumer price index rose 0.6% month over month in September, after a 0.4% increase in August, bringing its annual rise to 3.7%. A 9.1% monthly increase in the gasoline index accounted for more than half of the monthly rise in prices.
The Bureau of Economic Analysis is scheduled to publish its second GDP estimate on November 25, followed by its third estimate on December 23, both at 8:30 a.m. Eastern time. The later readings will allow the third-quarter estimate to be updated as additional data arrive, following the advance estimate scheduled for October 29. In pre-data market trading, the S&P 500 rose 0.3% in Wednesday’s session on October 28, the Dow Jones Industrial Average gained 0.2% and the Nasdaq Composite rose 0.3%. Bond yields moved after the Federal Reserve’s decision to leave its key interest rate unchanged, the Associated Press reported. Markets are also watching the GDP reading against the backdrop of growth and prices, while the figure published on October 29 will remain an advance estimate subject to revision.