In a riveting unveiling, the US Bureau of Economic Analysis revealed the latest US GDP data on a fateful Thursday. The numbers painted a portrait of economic strength, showcasing a remarkable annualized expansion of 4.9% during the third quarter of 2023. This robust leap stands as a testament to resilience, a striking contrast to the preceding quarter’s 2.1% and a bold defiance of the expected 4.3% according to the market consensus. It marks an important milestone as the nation experiences its most significant quarterly expansion since the closing quarter of 2021.
Consumer spending emerged as a beacon of hope, revealing a resolute 4% upturn that invigorated the economic landscape. Equally remarkable was the revival of exports, rebounding with unwavering vigour from a daunting 9.3% slump in Q2 to an impressive 6.2% growth. Importantly, imports, too, transformed their trajectory, transcending a -7.6% contraction in the previous quarter to an inspiring 5.7% expansion.
As we stand at the precipice, awaiting the Federal Reserve’s pivotal interest rate decision, the GDP data, while not causing seismic shifts, speaks loudly of an enduring sentiment. The consensus of a rate pause remains unshaken, but the undertone reverberates with the resonance that interest rates might endure their elevated position as we venture into 2024.
In light of these financial developments, the Core PCE Price Index took centre stage on Friday as the last enigma in the market’s quest for answers. All eyes were on an anticipated deceleration from 3.9% to 3.7% in the year-over-year Core PCE Price Index, and the market was accurate in its prediction, as the figure aligned with consensus. The unfolding drama of economic fate continues, and the world watches with bated breath as the narrative unfolds.
Sources: US Bureau of Economic Analysis, Trading Economics
Piece written by Tiaan van Aswegen, Trive Financial Market Analyst
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