U.S. economic growth accelerated over the summer, the government said Thursday in a report showing consumer spending remains strong despite inflation grumbles that challenge President Trump and his Republican Party ahead of Tuesday’s midterms.
The Bureau of Economic Analysis said gross domestic product, a broad measure of goods and services in the country, grew 3.4% in the quarter spanning June, July and August, up from 2.2% during the spring quarter.
“We had a great morning from the standpoint of GDP. It came out at a much higher number,” Mr. Trump told reporters Thursday as he departed Washington for South Carolina.
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Business spending surged 12.7% as firms invest in the artificial intelligence sector, and consumer spending increased 3.8%, making them twin contributors to growth.
Consumers are spending even as they voice concerns about elevated inflation.
Democrats say tariffs and energy costs from the Iran war boosted prices, so they want voters to punish the GOP for failing to deliver on Mr. Trump’s 2024 promise to drive down costs.
In a separate report on Thursday, the Commerce Department said personal consumption expenditures, or PCE, rose 0.5% for the month, putting the annual inflation rate at 3.6%
The rate is well above the Fed’s 2% inflation target.
Mr. Trump says the U.S. is in a “golden age” of economic production and contends that prices will come down once he settles the war after the midterms. He also says new factories from foreign investments will spark a job boom.
House Ways and Means Committee Chairman Jason Smith, Missouri Republican, said tax breaks and factory expensing from the GOP’s One Big Beautiful Bill drove growth and that Americans cannot afford a Democratic takeover in Congress.
“Today’s economic reports show that the Republican plan to create jobs, make life more affordable, and create an economy that gives opportunity to hardworking Americans is making progress,” Mr. Smith said in a statement. “America’s economy grew 3.4% last quarter as businesses invested in new equipment, computers, and technology. Permanent full expensing is helping job creators build and expand in America, giving more workers a shot at a steady job and the paycheck that goes with it.”
The hot-economy, high-price dynamic challenges the Federal Reserve, which raised interest rates in September to slow the economy and tame inflation.
Central bankers avoided a second hike on Wednesday, though some economists fear inflation will become entrenched if the Fed is not more aggressive.
Mr. Trump campaigned in 2024 on a promise to lower prices after a post-pandemic period of rampant inflation under President Joseph R. Biden.
Inflation came down from a 40-year high of over 9% to about 3% by January 2025. It has ranged from 2.3% to 4.2% in Mr. Trump’s second term.
The Consumer Price Index rose 3.7% for the year ended in September, up from 3.4% in August.
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