GDP Growth Exceeds Expectations
The U.S. economy grew faster than expected in the third quarter of this year, showing the biggest gain since the end of 2021, according to CNBC.
What’s going on: “Gross domestic product, a measure of all goods and services produced in the U.S., rose at a seasonally adjusted 4.9% annualized pace in the July-through-September period, up from an unrevised 2.1% pace in the second quarter, the Commerce Department reported Thursday.”
- “Economists surveyed by Dow Jones had been looking for a 4.7% acceleration in GDP, which also is adjusted for inflation.”
Why it happened: The spike was largely due to consumer spending increases, larger inventories, exports, government spending and residential investment.
The impact on the Fed: “This report confirmed what we already knew: The consumer went on a shopping spree in the third quarter,” an investment strategist told CNBC. “I don’t think anything in this report changes the outlook for monetary policy.”
In related news: Durable goods orders jumped 4.7% from August to September, according to U.S. Census Bureau data.
What to expect: Despite the Q3 growth, “demand is expected to slow moving forward,” said NAM Chief Economist Chad Moutray. “The U.S. economy is expected to grow by 2.4% and 1.7% in 2023 and 2024, respectively. Even as the probability of a ‘soft landing’ has increased, there continue to be sizable downside risks in the economic outlook.”