Housing investment falls 3.3%, down six of last seven quarters
The U.S. economy expanded at a 3.4% annual pace from July through September, the Commerce Department said Thursday, accelerating from the 2.2% growth recorded from April through June. The pickup came on the strength of a brisk rise in consumer spending and a sharp increase in business investment tied to the artificial-intelligence boom.
Gross domestic product — the nation’s output of goods and services — grew faster than the 3% pace economists had expected for the third quarter, according to a survey of forecasters by the data firm FactSet.
The reading showed an American economy, by far the world’s largest, that has proven resilient in the face of higher energy prices caused by the fighting with Iran. In inflation-adjusted terms, real gross domestic product stood at about $24.4 trillion in the third quarter, according to Federal Reserve Economic Data (FRED).
Consumer spending rose at a brisk 3.8% clip in the third quarter. Business investment, excluding housing, climbed 12.7%, reflecting the AI boom: investment in information-processing equipment surged 37.4%, software investment rose 9.6%, and research-and-development spending increased 7.5%.
Housing investment, hurt by high mortgage rates, dropped 3.3% and has now fallen six of the last seven quarters.
Thursday’s report was the first of three Commerce Department estimates of third-quarter GDP growth.