29 November 2023
If you are covering the US GDP revision for the third quarter, please see the following comment from Lindsay James, investment strategist at Quilter Investors:
“Today’s US GDP revision for the third quarter shows an economy that keeps on rolling, despite the continued rate hikes and the risks that were spelled out from the OECD today. Third quarter GDP now stands at an annualised rate of 5.2%, from 4.9%, and up from an annualised real rate of 2.1% in the second quarter, buoyed in part by government spending as the Inflation Reduction Act (IRA) and CHIPS Act are seemingly now making themselves felt in the data.
“Compared to the second quarter, the US consumer is showing surprising resilience with spending called out by the Bureau of Economic Analysis as boosting the level of growth. Disposable incomes have increased by 0.1% in Q3 – much slower than the 3.5% growth seen in Q2 but nevertheless much better than the contraction pencilled into early Q3 estimates.
“The OECD’s Economic Outlook was published this morning, now predicting a soft landing for advanced economies in 2024, with US GDP forecasts raised from 1% for 2024 to 1.3%. This is a slowdown from earlier forecasts but the US economy is showing serious resilience in the face of strong economic headwinds. Ultimately this underlines the message from central banks of interest rates being ‘higher for longer’, and it will be some time before the Federal Reserve feels like it is in a position to cut.”
