Economy Ran Even Hotter in Third Quarter as GDP Updated to 5.2% Rate, Surpassing Forecasts
Economy Ran Even Hotter – The economy grew even more presenant in the third quarter as the GDP growth rate exceeded forecasts to 5.2%!
The economy ran hotter than initially expected in the third quarter, according to Wednesday’s update from the Bureau of Economic Analysis.
Gross domestic product grew at an annual pace of 5.2 percent. Gross domestic product grew at an annual pace of 5.2 percent, which is higher than the initial high of 4.9 percent.
This was the strongest quarterly growth in 2020 in a decade, excluding the recovery from the pandemic.
The BIN update mainly reflected an upward revision in nonresidential fixed investment and state and local government spending that was more than offset by a decline in consumer spending.
The economy is expected to slow down in the current quarter and possibly enter a recession sometime in 2024.The Federal Reserve Bank of Atlanta projected fourth-quarter GDP growth at a 2.1 percent annual rate, up from 2% on Nov. 17.
The main question will be the power of the consumer, who accounts for about 70% of the US economy.Record online spending during the Thanksgiving holiday period bodes well for the crucial holiday season.Consumers spent a record $12.4 billion on Cyber Monday with more than $15 million spent per minute in the final hour of the day.Monday’s spending was 9.8 percent more than a year ago.
Ultimately, excess savings accumulated during the pandemic helped boost consumer spending and delay the opening of the temple, BCA Research wrote on Wednesday.However, the impact of excess savings is diminishing, as captured by the San Francisco Fed or Bacha Research’s US Investment Strategy.Tells you your savings will run out at some point next year, which bodes badly for the economic outlook.
Next week the government will report monthly jobs numbers for November.Although the number of jobs created has seen a significant decline, the labor market remains in an expansionary mode.
The better performance in the third quarter is likely to raise concerns at the Federal Reserve’s meeting next month but the market is unlikely to believe the central bank will raise interest rates any time soon.On Thursday the government will release the personal consumption price index for October, a metric closely followed by fat officials.
Overall the currency situation is working but still remains well above the two percent annual target of 3.2% or burst last month. Advantage will release its badge book summary of the economy later on Wednesday.
