Despite a series of economic shocks, growth in advanced economies appears to have remained resilient in the third quarter of 2026. The prolonged Middle East conflict has contributed to persistent inflation, while drought conditions have worsened and interest rates have risen further. Both the European Central Bank (ECB) and the Federal Reserve raised policy rates in September, adding to the economic pressures. However, nowcasts suggest that growth is slowing but not collapsing, with GDP figures expected to confirm this trend when they are released on October 29 for the US and October 30 for the euro area and its member states.
In the Euro area, growth is expected to slow to 0.3% quarter-over-quarter, though this pace is stable when excluding Ireland, whose GDP is volatile. The services sector has remained buoyant, with the services PMI rebounding sharply in Q3 to 53.0 in September. Job-related survey data and a stable unemployment rate of 6.4% in August suggest more hiring in Q3, supporting household consumption despite purchasing-power losses from persistent inflation. Corporate investment is also underpinned by strong new investment lending, which rose by 8.7% year-over-year in August.
France is likely to have returned to growth in Q3, with a nowcast indicating a 0.2% quarter-over-quarter increase. The drought worsened and industrial production remained subdued, but market services production rebounded in July and August, particularly in business services, restaurants, digital, and real estate. Household consumption is likely to have improved slightly due to higher electric vehicle sales. In Germany, growth continues for a fourth straight quarter, with a nowcast pointing to a 0.2% quarter-over-quarter increase in Q3. Manufacturing activity eased slightly, but government spending and exports remain growth engines.
In the United States, growth is likely to have gathered pace in Q3, with the Atlanta Fed’s GDP Now pointing to a 3.5% annualized growth rate. Domestic demand remains the engine, with consumption weathering the pickup in inflation and the AI-driven capex cycle remaining robust. Survey data highlight solid and broad-based momentum, though they also point to persistent price and supply-chain pressures.