U.S. Economic Growth Accelerates to 3.4% as Trade Tariffs Loom Before Midterms

Key Facts

U.S. real gross domestic product grew at an annual rate of 3.4% in the third quarter of 2026, compared with 2.2% in the second quarter, according to the U.S. Bureau of Economic Analysis' advance estimate. The reading came amid renewed debate over trade tariffs ahead of the midterm elections scheduled for November. But reports that President Donald Trump's administration had delayed potential tariffs on China, Japan and other partners could not be verified from a reliable source that could be accessed. The scope of the sectors and countries involved, or whether the investigations said to precede the tariffs had been completed, could not be confirmed either. The delay or its political motives therefore cannot be presented as an announced government decision.

The Bureau of Economic Analysis said investment, consumer spending and government spending contributed to the increase in output in the third quarter. That was partly offset by a decline in exports, while imports rose, according to the statement. The move from growth of 2.2% in the second quarter to 3.4% in the third quarter represents an acceleration in economic activity, based on the advance estimate. The figures provide economic context for the trade debate, but do not establish that growth considerations or tariffs prompted any particular delay decision. The midterm elections take place in November 2026 and include all 435 seats in the House of Representatives.

On prices, the personal consumption expenditures price index excluding food and energy, a measure of core inflation, rose 0.3% in September from August. Year over year, the index increased 3.1%, according to Bureau of Economic Analysis data. This reading corrects the initial version of the report: 3.1% is the annual change in September, not a new reading released on October 29. That puts core inflation alongside faster economic growth in the third quarter, as policymakers and consumers track the impact of prices. The bureau did not link these readings to the timing of potential tariffs in the data cited.

Associated Press coverage indicated that political debate over tariffs was underway before the election: more than 64% of U.S. adults in a recent poll said Trump had gone too far with the latest tariffs, compared with 58% in January. The news agency published the finding ahead of the November 3 election. In a separate report, it also said the administration exempted some Canadian imports from 50% tariffs on Canadian products worth $20 billion, and said the exemption was intended to help Republican Senator Susan Collins in her re-election fight. These facts provide context for the link between tariffs and electoral calculations, but do not confirm that this consideration led to the tariff delay attributed to a Nikkei report.

On China, a White House fact sheet in September said Trump and Chinese President Xi Jinping had reached agreement on recommendations to give more favorable tariff treatment to $30 billion worth of non-sensitive goods in each direction. The White House said the U.S.-China Trade Council would study reciprocal lists of goods that could receive reduced tariff treatment, with implementation subject to domestic laws and procedures. In May, Treasury Secretary Scott Bessent said Washington was "in no hurry" to extend the trade truce with China, described the situation as stable and noted that the truce was scheduled to end in November. These tracks remain separate from any new delay that has not been verified.

A U.S. trade investigation was examining allegations of excess production by 16 trading partners, including China and Japan, according to the Associated Press. The agency reported that the timing of potential tariffs after the midterm elections was a trade lawyer's expectation, not an announced government decision. The Bureau of Economic Analysis is scheduled to release its second estimate of third-quarter GDP on November 25, along with corporate profits data. Personal income and spending data for October are due on the same date, according to the bureau's schedule. The upcoming releases will update the picture of activity and prices, while the path for potential tariffs remains unresolved based on the available information.