GDP Growth Surges to Strong 3.4%

There's been some good economic news lately, despite the half-as-high-as-Biden-and-therefore-apocalyptic inflation.

October 1: Unemployment applications fell to the lowest level since July.

The four-week moving average was 200,000, a decrease of 2,500 from the previous week's revised average, the department also said.

Unemployment claims are a proxy indicator for layoffs, and they signal to economists where the job market is headed. So far this year, claims have remained below 220,000, which is a historic low.

American paychecks grew faster than the rate of inflation, which was totally not the case under Biden. So obviously Trump is a disaster.

American households have seen the buying power of their paychecks grow under President Trump, a welcome change from years of watching real compensation fall thanks to runaway inflation.

The average private-sector paycheck has grown faster than prices since President Trump took office, Bureau of Labor Statistics figures show. And in recent months, real pay is growing even faster.

From January 2025, the month Trump was inaugurated, through August 2026, average weekly earnings of all employees on private payrolls rose from $1,222.14 to $1,298.94, a gain of 6.3 percent. The Consumer Price Index rose 4.8 percent over those 19 months. Adjusted for inflation, the weekly paycheck was up 1.5 percent. In January 2025 dollars, that is a gain of about $18 a week, from $1,222 to $1,240.

The most recent three months were stronger. From May to August, the average paycheck rose from $1,285.91 to $1,298.94, or 1.0 percent, while prices were essentially unchanged, up 0.05 percent. Real weekly pay rose 1.0 percent in that span, about $12 a week. August is the latest month for which both earnings and prices are available. The September price index is scheduled for October 14.

Over the four years of the Biden administration, the paycheck shrank after inflation. From January 2021 to January 2025, average weekly earnings rose from $1,047.55 to $1,222.14, a gain of 16.7 percent. Prices rose 21.4 percent. Real weekly pay fell 3.9 percent. In the dollars of January 2025, the paycheck went from about $1,272 at the start of that administration to $1,222 at the end, a loss of about $50 a week.

The service industry grew at its fastest pace in five years. And exports grew, and hiring accelerated.

U.S. service-sector activity expanded in September at the fastest pace in more than five years, with technology businesses leading a broad advance as stronger demand encouraged companies to increase hiring, according to a survey released Monday by S&P Global.

The Services PMI Business Activity Index rose to 58.8 from 56.5 in August, marking its fourth consecutive monthly increase and the strongest expansion since July 2021. Readings above 50 indicate growth compared with the previous month.

Activity increased across all five broad services sectors covered by the survey for the first time in ten months. Information and communication businesses reported by far the strongest expansion, while transportation and storage returned to growth.

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Export orders also increased for a second consecutive month, although their growth was much slower than the rise in total new business. The pace of export-order growth matched August's 20-month high.

Companies responded to rising workloads by adding workers for a third consecutive month. The pace of services job creation was the strongest since June 2022. Some businesses reported that they had been able to fill previously vacant positions.

The latest advanced estimate for the growth: a high 3.4% increase in the nation's gross domestic product.

Real gross domestic product (GDP) increased at an annual rate of 3.4 percent in the third quarter of 2026 (July, August, and September), according to the advance estimate released today by the U.S. Bureau of Economic Analysis (BEA). In the second quarter, real GDP increased 2.2 percent.

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Compared to the second quarter, the acceleration in real GDP in the third quarter primarily reflected an acceleration in investment and an upturn in government spending that were partly offset by a downturn in exports. Imports increased more in the third quarter than in the second quarter.

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The price index for gross domestic purchases increased 3.0 percent in the third quarter, compared with an increase of 5.6 percent in the second quarter. The personal consumption expenditures (PCE) price index increased 2.1 percent, compared with an increase of 5.0 percent, and the PCE price index, excluding food and energy increased 2.5 percent, compared with an increase of 3.3 percent.

The conventional wisdom is that voters form their opinions about the state of the economy six months before an election. They do not update their opinions with late-coming information.

So this will not help us in the midterms. I guess maybe we could guess that people felt this growth before it was officially reported, but Gallup says economic confidence is low and has been for a long while.

posted by Disinformation Expert Ace at 05:20 PM

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