Inflation accelerates to 3.6% in September as economy grows
The Personal Consumption Expenditures (PCE) price index, the Federal Reserve's preferred measure of inflation, rose 3.6% year-over-year in September, up from the previous month's figure.
Illustrative image of dollars
The U.S. economy grew by 3.4% in the third quarter of 2026, exceeding market forecasts, while inflation also accelerated in September, according to data released by the Department of Commerce. The economic outlook presents mixed signals for President Donald Trump ahead of next week's midterm elections.
The Personal Consumption Expenditures (PCE) Price Index—the Federal Reserve's preferred measure of inflation—posted a year-over-year increase of 3.6% in September, exceeding the previous month's figure.
Meanwhile, the Gross Domestic Product (GDP) rose 3.4% between July and September, according to a preliminary estimate from the Bureau of Economic Analysis (BEA), an agency within the Department of Commerce. The result exceeded analysts' expectations, who had forecast growth of 3.1%.
The figure also represents an acceleration compared with the second quarter of 2026, when the U.S. economy grew by 2.2%.
In a statement, the BEA explained the factors that drove economic activity during the third quarter. "Real gross domestic product (GDP) grew at a year-over-year rate of 3.4% in the third quarter of 2026 (July, August, and September), according to the preliminary estimate released today by the U.S. Bureau of Economic Analysis (BEA)," the agency noted.
Drivers of growth
The data show an economy that is growing at a faster pace than the market had anticipated, although this is accompanied by rising inflation—two key indicators for the Trump administration just days before a major election.
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