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# The US economy grew 3.4% last quarter, but September's spending went on higher prices
- URL: https://www.sharespective.com/stories/us-economy-grew-3-4-last-2026-10-30/
- Published: 2026-10-29T21:15:00.000Z
- Updated: 2026-10-29T21:50:40.000Z
- Description: The US economy grew at an annualised 3.4% in the September quarter, the Commerce Department said on Thursday. That was faster than economists expected, and up from 2.2% in the June quarter.
- Author: Shaun Botha
- Tags: Economy, #story, #group-economy

The US economy grew at an annualised 3.4% in the September quarter, the Commerce Department said on Thursday. That was faster than economists expected, and up from 2.2% in the June quarter.

**So where did the money go?** In September, most of it went on higher prices. Americans spent 0.5% more than in August, and prices rose 0.5% too. After inflation, spending barely moved.

Incomes are falling behind. Personal income rose only 0.2% in September, and income after tax and inflation fell 0.3%.

![Chart: US spending rose in September. Prices took most of it. Monthly change in US consumer spending (columns) and in its prices (dots), January 2024 to September 2026, in percent. Both rose 0.5% in September.](https://storage.ghost.io/c/02/71/0271df32-cec6-421f-9f13-b06ab90e54c1/content/images/2026/10/us-economy-grew-3-4-last-2026-10-30-chart.jpg)

This story’s chart of the day.

Inflation is also moving the wrong way for the Fed. The PCE price index, its preferred measure, rose 3.6% in the year to September, up from 3.4% in August. Core inflation, which leaves out food and energy, rose to 3.1%.

Next up 

traders put the chance of a December Fed rise at 84.6% after Thursday's figures, up from 82.6% after Wednesday's decision. I'd want to see incomes catch up with prices before reading strong growth as a sign of a strong consumer. Until they do, the extra spending is coming out of savings.

[ This story ran in Half a Trillion Friday 30 October’s edition, with the market snapshot, the other two stories, the numbers and the week ahead. Read the whole edition → ](https://www.sharespective.com/sharespective-2026-10-30/)