US consumers continues to drive strong GDP growth

US GDP increased by more than 2.8% at an annualized rate in Q3, supported by continued acceleration the growth of personal consumption expenditures.

Consumption increased close to 3.7% over the quarter, the fastest growth rate since Q1 2023, and contributed 2.46 percentage point to Q3’s overall growth rate. The solid economy expansion, also supported by positive contributions from investment and government expenditures, was offset by higher level of import and slower increase in inventories.

Looking at private domestic final purchases, a gauge of domestic demand which excludes the effect of government consumption, trade and inventories and is often cited by Federal Reserve officials, showed that local expenditures accelerated to almost 3.2%, from 2.7% in Q2.