US economy grows 3.4% in third quarter as inflation hits 3.7%

· Economy · United States

US gross domestic product grew a better-than-expected 3.4% in the third quarter while inflation accelerated in September, with the personal consumption expenditures price index projected to rise 0.5% for an annual rate of 3.7%, according to Commerce Department data released less than a week before the midterm elections. The figures contrast with a sharp deterioration in consumer sentiment. Gold steadied near $4,000 an ounce, on track for a second monthly loss, as energy-led inflation raised the prospect of a US rate increase before year-end. Economist Stephanie Kelton noted the economy is outperforming G7 peers with fiscal support even as the deficit runs at about 6.5% of GDP, roughly half of it interest costs.

Why it matters：Strong growth combined with sticky inflation complicates the Federal Reserve's path on rates and shapes how voters judge the economy days before US midterms.

Key points

  • GDP growth of 3.4% beat expectations.
  • The PCE price index was projected at 0.5% for September, or 3.7% annually.
  • Gold held near $4,000 an ounce amid rate-hike expectations.

Sources (original reporting)

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