U.S. economy grew at a 2.8% pace in the third quarter, less than expected

Summary

In this financial report, market indicators show a modest uptick with NASDAQ rising by 20 points and the S&P by 3. The latest GDP growth for the third quarter is 2.8%, slightly below expectations. Consumer consumption outperformed at 3.7%, marking the highest since early 2023. Meanwhile, the price index came in lower than projected, indicating easing inflation trends. Yields are shifting upward, particularly in shorter-term bonds, amid cautious expectations regarding Federal Reserve policies. The report emphasizes the importance of global inflation data, particularly from Germany, as it could impact market dynamics.

Takeaways

• 😀 The NASDAQ is up by about 20 points and the S&P is up by 3 points.
• 😀 Treasury yields show an uptick, with the two-year at 4.13% and the ten-year at 4.26%.
• 😀 The third-quarter GDP growth came in at 2.8%, slightly lower than the expected 3%.
• 😀 Consumption growth for the quarter was impressive, with a 3.7% increase, the best since Q1 2023.
• 😀 The Price Index showed a 1.8% increase, the lowest since Q4 2023, which is seen as positive news for inflation.
• 😀 Core Price Index growth came in at 2.2%, which was well below expectations of 2.8% and compares favorably to 2.0% in the last quarter of 2023.
• 😀 Treasury yields are rising, with the short-end moving up due to market expectations regarding the Federal Reserve’s stance on inflation.
• 😀 Regional inflation reports, including those from Germany, are showing signs of higher inflation, which might impact broader expectations.
• 😀 The German inflation data, released at the top of the hour, is key to understanding global inflationary trends.
• 😀 Despite these economic indicators, there are still many important data points yet to be released that could influence market expectations.

Q & A

What was the reported GDP growth for the third quarter?

The GDP growth for the third quarter was reported at 2.8%.

How does the third quarter GDP compare to previous expectations?

Many analysts were expecting a GDP growth around 3%, making the 2.8% slightly lower than anticipated.

What consumption growth was anticipated, and what was the actual figure?

Consumption growth was expected to be around 2.2%, but the actual figure came in at 3.7%, which is the highest since the first quarter of 2023.

What was the expectation for the price index, and what was the actual result?

The expectation for the price index was 1.9%, but the actual result was 1.8%, marking the lowest since the last quarter of 2023.

How did the core price index perform in comparison to expectations?

The core price index came in at 2.2%, which was below the expected 2.8%, and it was consistent with the last quarter's figure of 2.0%.

What trends were observed in Treasury yields following the data release?

Treasury yields were hovering around 4.26%, with the two-year yield slightly below 4.18%, indicating an upward trend led by expectations for the Federal Reserve.

What external factors were mentioned that could affect inflation readings?

The script noted that regional inflation numbers from places like Germany have been hotter, which could impact inflation expectations.

Why is the discussion of German inflation data significant?

The German inflation data is significant because it provides context for inflation trends that might influence the U.S. economic outlook and monetary policy.

What does Rick Santoli suggest about the recent inflation trends?

Rick Santoli indicates that while there has been nice progress in inflation reduction, the market has experienced similar situations before.

What are the broader implications of these economic indicators for the Federal Reserve?

These economic indicators suggest the Federal Reserve may need to adjust its policies in response to ongoing inflation trends and economic growth.