Money Control Place
  • Politics
  • Business
  • Stocks
  • Investing
  • Politics
  • Business
  • Stocks
  • Investing

Money Control Place

Business

U.S. GDP grew at a 4.9% annual pace in the third quarter, better than expected

by October 27, 2023
October 27, 2023
U.S. GDP grew at a 4.9% annual pace in the third quarter, better than expected

The U.S. economy grew even faster than expected in the third quarter, buoyed by a strong consumer in spite of higher interest rates, ongoing inflation pressures, and a variety of other domestic and global headwinds.

Gross domestic product, a measure of all goods and services produced in the U.S., rose at a 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.

The sharp increase came due to contributions from consumer spending, increased inventories, exports, residential investment and government spending.

Consumer spending, as measured by personal consumption expenditures, increased 4% for the quarter after rising just 0.8% in Q2. Gross private domestic investment surged 8.4% and government spending and investment jumped 4.6%.

Spending at the consumer level split fairly evenly between goods and services, with the two measures up 4.8% and 3.6%, respectively.

The GDP increase marked the biggest gain since the fourth quarter of 2021.

Markets reacted little to the news, with stock market futures negative heading into the open and Treasury yields mostly lower.

While the report could give the Federal Reserve some impetus to keep policy tight, traders were still pricing in no chance of an interest rate hike when the central bank meets next week, according to CME Group data. Futures pricing pointed to just a 27% chance of an increase at the December meeting following the GDP release.

“Investors should not be surprised that the consumer was spending in the final months of the summer,” said Jeffrey Roach, chief economist at LPL Financial. “The real question is if the trend can continue in the coming quarters, and we think not.”

In other economic news Thursday, the Labor Department reported that jobless claims totaled 210,000 for the week ended Oct. 21, up 10,000 from the previous period and slightly ahead of the Dow Jones estimate for 207,000. Also, durable goods orders increased 4.7% in September, well ahead of the 0.1% gain in August and the 2% forecast, according to the Commerce Department.

At a time when many economists had thought the U.S. would be in the midst of at least a shallow recession, growth has kept pace due to consumer spending that has exceeded all expectations. The consumer was responsible for about 68% of GDP in Q3.

Even with Covid-era government transfer payments running out, spending has been strong as households draw down savings and ramp up credit card balances.

The gains also come despite the Federal Reserve not only raising rates at the fastest clip since the early 1980s but also vowing to keep rates high until inflation comes back to acceptable levels. Price increases have been running well ahead of the central bank’s 2% annual target, though the rate of inflation at least has ebbed in recent months.

The chain-weighted price index, which takes into accounts changes in consumer shopping patterns to gauge inflation, rose 3.5% for the quarter, up from 1.7% in Q2 and higher than the Dow Jones estimate for 2.5%.

Along with rates and inflation, consumers have been dealing with a variety of other issues.

The resumption of student loan payments is expected to take a bite out of household budgets, while elevated gas prices and a wobbly stock market are hitting confidence levels. Geopolitical tensions also pose potential headaches, with fighting between Israel and Hamas and the war in Ukraine posing substantial uncertainties about the future.

While the U.S. has proven resilient to the various challenges, most economists expect growth to slow considerably in the coming months. However, they generally think the U.S. can skirt a recession absent any other unforeseen shocks.

More from CNBC:

Southwest slows 2024 growth as travel demand moderatesA credit card Christmas: Taking on shopping debt carries more risk this holiday seasonComcast sinks despite profit beat, as broadband subscribers slip and ad revenue slumps

This post appeared first on NBC NEWS
0
FacebookTwitterGoogle +Pinterest
previous post
Is the Bear Back?
next post
Klimat X Announces Receipt of Second Disbursement of Financing for Sierra Leone Rewilding Project

Related Posts

Target says Pride collection will appear in ‘select’...

May 14, 2024

United Airlines CEO responds to string of safety...

March 20, 2024

Klarna lands buy now, pay later deal with...

March 21, 2025

U.S. judge orders Google to share search data...

September 3, 2025

Pixar is laying off 14% of its workforce...

May 22, 2024

The trucking industry hits the brakes with tariffs...

April 24, 2025

How Delta made itself America’s luxury airline —...

June 26, 2024

Why the Fed keeping rates higher for longer...

April 25, 2024

Bitcoin is just another tech stock, not a...

March 25, 2025

Former MGM Grand casino president to be sentenced...

May 9, 2024

    Get free access to all of the retirement secrets and income strategies from our experts! or Join The Exclusive Subscription Today And Get the Premium Articles Acess for Free


    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Latest

    • S&P 500 Breaking Out Again: What This Means for Your Portfolio

    • S&P 500 Breaking Out Again: What This Means for Your Portfolio

    • Québec Communities Vote “No” to La Loutre Graphite Mine

    • Top 5 Canadian Mining Stocks This Week: Carlton Precious Gains 78 Percent

    • Lode Gold Closes $1.51 Million Upsized Private Placement

    • Editor’s Picks: Gold Sets New Price Record, Silver Hits 14 Year High

    Categories

    • Business (1,370)
    • Investing (2,870)
    • Politics (3,699)
    • Stocks (1,782)
    • Uncategorized (20)
    • About us
    • Contact us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: MoneyControlPlace.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 moneycontrolplace.com | All Rights Reserved