The official numbers for the third quarter of 2023 for the United States indicated robust growth on Thursday. The likelihood of a recession in 2024 was mitigated by strong consumer expenditure and an improving labor market.
According to the BBC, the latest numbers from the Commerce Department reveal that GDP increased at an annual rate of 4.9% in the period of July-September, up from 2.1% in the previous quarter and beyond the predictions of the experts who polled for the report, who had predicted growth of 4.5%.
The increase is attributed, among other things, to “accelerations in private inventory investment, consumer spending, and federal government spending,” as stated by the US Bureau of Economic Analysis.
The Personal Consumption Expenditures Price Index, or PCE deflator, which the Federal Reserve often uses to measure short-term inflation risks, was 3.5% for the quarter. The core PCE deflator, which doesn’t include food and energy prices, slowed down to 2.4%, which is the lowest level since the last quarter of 2019 and could make people less worried about future interest rate hikes.
Commerce Department figures also indicated that consumer spending was responsible for 2.7% of the expansion, while an unanticipated rise in company inventories (a good indicator of forthcoming demand) accounted for an additional 1.3%.
According to TheStreet, the bond markets were buoyed by data from the Labor Department showing that the number of Americans seeking for new jobless benefits jumped by 10,000 to 210,000 in the week ending October 21.
US Treasury rates have declined in response to economic data, with the 10-year yield falling to 4.89% and the 2-year yield falling to 5.04%. At the policy meeting next week in Washington, the Federal Reserve is expected to leave interest rates alone between 5.25% to 5.5%, according to the CME Group’s FedWatch program, which measures investors’ views of near-term interest rate adjustments.
Specifically, analysts from Bloomberg were quoted by CryptoGlobe reporting before the data release as discussing the possible worldwide economic ramifications of the continuing war between Israel and Hamas and how it may precipitate a global recession, particularly if it worsens.
Investors may wish to wait until interest rates increase again, since the subsequent sell-off, according to Jim Cramer, presenter of CNBC’s “Mad Money” and well-known market expert, believes would drop prices.
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