U.S. Q3 GDP preliminary estimate is in: annualized growth of +3.4%.
Q2 was just 2.2%, and Reuters’ survey expected 3.2%. Once again, the result came in higher. The U.S. economy: “Sorry, I didn’t fall into recession this time either.”
Here are a few key figures from the BEA, filtered for you:
1️⃣ Real GDP: +3.4% annualized (Q2: +2.2%)
2️⃣ Private domestic final sales (consumption + private fixed investment): +4.9%, versus +4.6% in Q2. This is the real underlying picture of domestic demand.
3️⃣ PCE price index: 2.1% (Q2: 5.0%); core PCE: 2.5% (Q2: 3.3%)
4️⃣ Investment was driven mainly by inventories and equipment. Information-processing equipment led the equipment category, mostly computers and peripherals.
5️⃣ Capital goods made the biggest contribution to imports, while the decline in exports was mainly due to petroleum products.
Put in plain English: AI capex is pouring real money into GDP, with server and computer imports showing up directly in the numbers. On the consumer side, spending on healthcare, restaurants and lodging, and prescription drugs is all rising.
Yesterday, the FOMC held rates steady at 3.75–4.00%, with two members voting for a rate hike. Cooling quarterly inflation is good news, but don’t expect one GDP report to bring rate cuts forward.
My take: strong growth + easing quarterly inflation is a comfortable combination for U.S. stocks. Anyone betting against the U.S. economy in recent years—especially those shorting the Nasdaq—should know that best.
Note that this is only the preliminary estimate; the second estimate on November 25 may be revised.
Source: U.S. Bureau of Economic Analysis (BEA), released 10-29; Reuters. Not investment advice.
Q2 was just 2.2%, and Reuters’ survey expected 3.2%. Once again, the result came in higher. The U.S. economy: “Sorry, I didn’t fall into recession this time either.”
Here are a few key figures from the BEA, filtered for you:
1️⃣ Real GDP: +3.4% annualized (Q2: +2.2%)
2️⃣ Private domestic final sales (consumption + private fixed investment): +4.9%, versus +4.6% in Q2. This is the real underlying picture of domestic demand.
3️⃣ PCE price index: 2.1% (Q2: 5.0%); core PCE: 2.5% (Q2: 3.3%)
4️⃣ Investment was driven mainly by inventories and equipment. Information-processing equipment led the equipment category, mostly computers and peripherals.
5️⃣ Capital goods made the biggest contribution to imports, while the decline in exports was mainly due to petroleum products.
Put in plain English: AI capex is pouring real money into GDP, with server and computer imports showing up directly in the numbers. On the consumer side, spending on healthcare, restaurants and lodging, and prescription drugs is all rising.
Yesterday, the FOMC held rates steady at 3.75–4.00%, with two members voting for a rate hike. Cooling quarterly inflation is good news, but don’t expect one GDP report to bring rate cuts forward.
My take: strong growth + easing quarterly inflation is a comfortable combination for U.S. stocks. Anyone betting against the U.S. economy in recent years—especially those shorting the Nasdaq—should know that best.
Note that this is only the preliminary estimate; the second estimate on November 25 may be revised.
Source: U.S. Bureau of Economic Analysis (BEA), released 10-29; Reuters. Not investment advice.