The U.S. economy grew at a 2.8% annualized rate in the third quarter, driven by a surge in consumer spending and increased federal defense expenditures. This follows a 3% growth rate in the prior quarter and exceeded most forecasts. Consumer spending, the largest contributor to economic activity, rose by 3.7%, marking the strongest increase since early 2023. The robust growth is expected to support the Federal Reserve’s ongoing plans to reduce interest rates in the coming months.