US GDP Beats Expectations At 4.9% In Q3

Its highest quarterly rate since 2021, GDP grew across the board, with a 4.8% growth in goods spending and 3.6% growth in service spending, according to data from the Bureau of Economic Analysis.

The only sector that witnessed a decrease was non-residential fixed investment (0.1% fall), largely due to a 3.8% drop in equipment spending.

ECB meets expectations as rates held at 4%

The jump from 2.1% last quarter has left the US economy "flying high", according to Neil Birrell, CIO of Premier Miton Investors.

"The data we are seeing will be giving the Fed plenty to think about when they meet," said Birrell. "We have a strong economy, inflation that is moderating, a decent jobs markets and a consumer sector that is still spending.

"What will the Fed make of that? It points to "higher for longer" being the outcome."

Market predictions for a 1 November hike from the Federal Reserve rose to 3.5%, compared to a 0% chance before the data were released, according to data from CME Group. The remaining 96.5% is bet on another rates pause.

The figures also come following strong numbers in the jobs market for the country, with US total nonfarm payroll employment increasing by 336,000 in September, above the 12-month average of 267,000.

Appetite for bonds not abating in face of 'exaggerated' 5% Treasury yields

However, Richard Flynn, managing director at Charles Schwab UK, noted the "robust picture" painted by last month's labour market data concealed "several indicators of a less than healthy jobs market", such as a substantial fall in temporary help services payrolls.

"Similarly, the rising value of the US dollar, increasing oil prices and escalating Treasury bond yields are all metrics that generally point to a tightening financial environment," he added. "Today's data are welcome, but a shallow recession is not yet off the table."

 

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