Rolling coverage of a crucial growth report on the US economy, after strong results from America’s tech giants cheer the markets
- Latest: US economy grew by 3%/year in Q3.
- Consumer spending and business investment drove growth
- Exports also rose
- Amazon, Alphabet and Microsoft smashed forecasts last night
- Amazon and Alphabet shares both jump over $1,000 in after-hours trading
- Japan’s Nikkei has hit a 21-year high
The US dollar is strengthening, as Wall Street traders calculate that this solid growth raises the chances of an interest rate rise in December:
Dollar’s good week just got better with 3Q GDP +3% pic.twitter.com/hkm4M5UQ7O
Economists are impressed by America’s economic performance over the last quarter, especially given the disruption caused by the hurricane season.
For example, here’s Mohamed El-Erian, chief economic advisor at financial services giant Allianz:
Good US #GDP print for the third quarter–3% annualized growth, compared to 2.7% consensus expectations,& follows 3.1% for the prior quarter
Q3 GDP grew at a healthy 3.0% (above consensus forecast of 2.6%), following 3.1% in Q2. The economy keeps motoring along at a healthy rate.
The good news: The economy keeps on keeping on, shrugging off political uncertainty, hurricanes, etc.
The bad: The more persistent part of growth—Final sales to private domestic purchasers—grew at only 2.2%. And advance numbers often revised.
Growth over the last four quarters was 2.3%. PDFP was 2.2% in Q4. We are still a ~2% growth economy. But a 2%+a little > 2%-a little.
For those that don’t know, PDFP = consumption + fixed investment. Does not have inventories, NX, govt–all volatile. https://t.co/FrCW6KKBQF