# US economy grew 3.4% in third quarter

> Gross domestic product expanded faster than expected in the three months before midterm elections, driven by consumer spending and investment.
- Title: US economy grew 3.4% in third quarter · ABC News | Shortify
- Summary: Gross domestic product expanded faster than expected in the three months before midterm elections, driven by consumer spending and investment. US GDP grew at…
- Keywords: us economy, gdp growth, inflation, federal reserve, consumer spending, midterm elections, interest rates, news, economy, grew, third, quarter
- Source: ABC News — https://abcnews.com/Business/gdp-report-set-provide-snapshot-economy-ahead-midterm/story?id=137635585
- Author: ABC News
- Read time: 1 min
- Topics: us economy, gdp growth, inflation, federal reserve, consumer spending, midterm elections, interest rates, news
## Economy beats expectations
Gross domestic product expanded at an annualized rate of 3.4% over the three months ending in September, exceeding economists' expectations of 3.1%.
## Growth accelerates from prior quarter
The third quarter reading marked an acceleration from 2.2% annualized GDP growth in the previous quarter and outpaced 2.5% growth in the first three months of the year.
## Consumer spending drives growth
An uptick in consumer spending and an acceleration of investment made up the primary causes of economic growth. Consumer spending, which accounts for about two-thirds of US economic activity, rose at a solid pace.
## Inflation surge poses challenge
Economic growth this year has come amid a surge of inflation set off by the Iran war in late February.Prices increased 3.
## Fed Chair signals optimism
Speaking at a press conference in Washington, D.C., on Wednesday, Fed Chair Kevin Warsh voiced optimism about US economic performance, even as he acknowledged the challenge posed by elevated inflation.

> Economic activity is expanding at a strong pace. While uncertainty remains, owing in part to geopolitical developments, domestic spending has been resilient.
## Rate hike odds climb to 85%
The central bank raised interest rates a quarter of a percentage point last month. On Wednesday, the Fed left rates unchanged, but odds of a quarter-point rate hike at the December meeting are pegged at…
## Another hike risks economic slowdown
Another potential rate increase would mean pressing the brakes harder on the economy, in turn risking sluggish growth and slowing the job market further.
## Key takeaway

US GDP grew at an annualized rate of 3.4% in the third quarter, exceeding economist expectations of 3.1%, but inflation remains elevated at 3.7%.