WASHINGTON - The U.S. economy expanded at a 3.4% annual rate in the third quarter, accelerating from 2.2% in the previous three months as resilient consumer spending and a surge in business investment outweighed declines in exports and housing.

The Commerce Department's Bureau of Economic Analysis said Thursday that consumer spending, private investment and government spending all contributed to growth from July through September. Imports, which are subtracted in the calculation of gross domestic product, increased, while exports declined.

The result exceeded the roughly 3.2% pace expected by economists surveyed by Reuters and was the strongest growth in a year. The figure is an annualized rate, meaning it estimates how much the economy would grow if the quarter's pace continued for a full year. It is also the government's advance estimate and will be revised as more complete data arrive.

Consumer spending rose at a 3.8% annual rate, up from 2.5% in the second quarter. Households spent more on services including health care, restaurants and hotels, and on goods including prescription drugs. That strength matters because consumer activity accounts for about two-thirds of the U.S. economy.

Business investment provided another major lift. Investment in equipment rose 20.9%, while spending on information-processing equipment increased 37.4%. Software investment grew 9.6% and research and development increased 7.5%, according to figures reported by The Associated Press. The gains reflected continued construction of the computing capacity, data systems and other infrastructure needed for artificial intelligence.

The broader measure of private domestic demand was even stronger. Real final sales to private domestic purchasers, which excludes trade, inventories and government spending, rose 4.9%. That suggests the headline was not produced only by temporary inventory changes or federal activity.

But the report also contained warnings. Residential investment fell 3.3%, extending pressure from high borrowing costs and limited affordability. The personal saving rate declined to 4.1% in the quarter and to 3.8% in September, Reuters reported, indicating that some households supported spending by saving less.

Inflation also accelerated in September. After-tax household income adjusted for inflation slipped from August and was only 1% higher than a year earlier, while real spending was 2.5% higher. The Federal Reserve left its benchmark rate in a range of 3.75% to 4% this week as policymakers weighed persistent price pressure against a cooling labor market.

The GDP price index rose 3%, while the Federal Reserve's preferred personal consumption expenditures price index increased 2.1% during the quarter. Excluding food and energy, that measure rose 2.5%. The BEA is scheduled to publish its second estimate on Nov. 25.

Growth is real, but it is not evenly felt

The numbers are a reminder of the United States' fundamental economic strength. American consumers continued to spend, companies continued to invest, and the country's technology sector translated innovation into factories, servers, software and research at a scale few competitors can match.

That advantage should not be dismissed simply because artificial intelligence has become a source of market anxiety. Productive investment can raise output and wages over time, and the United States benefits when capital is committed to technologies developed inside an open, competitive economy rather than directed by an authoritarian state.

Still, a strong national total is not the same as security for every family. A household facing higher grocery bills, expensive housing and slower real-income growth does not experience a 3.4% GDP figure as an abstract victory. Falling savings suggest that some consumers may be maintaining their living standards by using a smaller financial cushion.

There is also a concentration risk. A large part of the investment boom is tied to AI infrastructure and the biggest technology companies. If expectations outrun profitable uses, a correction could weaken equipment orders, construction and financial markets at the same time. The advance estimate does not prove that such a reversal is coming, but it makes diversification and transparent accounting more important.

Washington's task is to preserve the conditions that produced the expansion without pretending that every problem has been solved. That means protecting competitive markets, expanding energy and housing supply, keeping trade relationships reliable and avoiding fiscal promises that add demand without raising productive capacity.

The most useful conclusion is neither triumph nor panic. The U.S. economy entered the final quarter with powerful momentum and a genuine technology advantage. It also carried inflation, housing pressure and increasingly stretched household budgets. Responsible policy must acknowledge both realities, because durable American strength depends not only on impressive investment totals but on whether ordinary citizens can share in the gains.