US Economy Grew 3.4% in Third Quarter as AI Investment Offset a Record Trade Drag

The US economy grew at a 3.4% annual rate in the third quarter of 2026, the Bureau of Economic Analysis said in its advance estimate.

Growth came from investment, consumer spending, and government spending, partly offset by a drop in exports. Imports, which subtract from the GDP math, rose.

The number beat expectations. Economists surveyed by Reuters had penciled in 3.2%, and the Atlanta Fed's GDPNow tracker sat at 3.3%. The economy grew 2.2% in the second quarter.

The equipment story runs through one category. BEA flagged information processing equipment, mainly computers and peripherals, as the leader within equipment investment.

The AI buildout showed up twice in the data

Those computers largely arrived from abroad, which is why trade pulled so hard in the other direction. The goods trade deficit widened 2.1% in September to $134.9B, the largest shortfall since March 2025, as capital goods imports jumped 7.5% on the month and 77.2% from a year earlier.

Oxford Economics' Grace Zwemmer estimated trade alone would be a 3.25 percentage point drag on growth. Goldman Sachs economists had looked for business fixed investment to grow 10.2%.

Consumers carried the rest. Spending accounts for more than two-thirds of the economy and was projected to top a 3.0% pace, down from 3.8% in the second quarter, even with gasoline above $4 a gallon.

Economists question how long the AI engine runs

Goldman's chief economist Jan Hatzius expects the growth boost from AI to peak in late 2026 or early 2027. He also figures higher long-term rates, up roughly 100 basis points across developed markets since early 2026, could shave a cumulative 0.6% from GDP if they stick.

Apollo's Torsten Slok is blunter, writing that AI has delivered zero financial payoff to corporate America outside tech. Revenue per worker and margins are climbing for the Magnificent 7 and flat for the rest of the S&P 500.

Goldman estimates the AI wealth effect added 0.4 percentage points to consumer spending growth over the past year, a channel that fades if AI stocks keep sliding.

The Federal Reserve held its benchmark rate in the 3.75% to 4.00% range this week while calling inflation elevated. Growth above 3% sits well clear of the roughly 2% pace some Fed officials view as non-inflationary, and economists expect a rate hike in December.