The U.S. economy grew at a 3.4% annualized pace in the third quarter, up from 2.2% in the second quarter and above forecasts, driven by consumer spending and artificial intelligence-related investment. However, real consumer spending was flat in September, inventories contributed 1.6 percentage points to growth and housing investment fell 3.3%. The housing market remains weak, with the buyer-traffic index dropping to 18, homeownership declining and Goldman Sachs forecasting a 5% drop in housing investment in the fourth quarter. Final domestic private demand nevertheless strengthened by 4.9%, while underlying inflation measured by the Dallas Fed’s trimmed mean was estimated at 2.27%, the Fed held rates steady and Goldman Sachs expects a 25-basis-point increase in December.
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