The pace of U.S. economic growth in the third quarter was slightly slower than economists expected.
According to advance estimates of the U.S. gross domestic product (GDP) for the third quarter released by the U.S. Bureau of Economic Analysis, the economy will grow at an annualized rate of 2.8% during the same period, compared to the 2.9% expected by economists polled by Bloomberg. growth was below. This number was lower than the 3% growth in the second quarter.
Economists said third-quarter gross domestic product (GDP) data reflected strong economic growth, although it was slightly lower than expected. Paul Ashworth, chief North American economist at Capital Economics, said the report shows the economy is growing at a solid pace.
“Overall, the U.S. economy appears to be performing well,” Ashworth said in a note to clients Wednesday.
Meanwhile, the “core” personal consumption expenditure index, which excludes volatile food and energy categories, rose 2.2% in the second quarter, beating expectations of 2.1%, but 2.8% in the previous quarter. This was well below the rise.
The release of the statistics comes as investors try to gauge how much more the Federal Reserve will cut interest rates in 2024. As of Wednesday’s announcement, the market was pricing in a 99% chance that the Fed would cut interest rates by 25 basis points at next week’s meeting. CME FedWatch Tool.
“Although GDP is on the back foot, it sends a clear message that the economy is on track and inflation is moderating, which is a good sign for the Federal Reserve,” Ryan Sweet, chief U.S. economist at Oxford Economics, said in a note to clients on Wednesday. That’s good news.”
Sweet added: “GDP growth trends remain strong, reducing the risk of a sudden and significant increase in layoffs. This further strengthens our confidence in our above-consensus forecast for growth next year. ” he added.
Wednesday’s GDP data showed the Federal Reserve has begun a rate-cutting cycle as economic growth remains strong and inflation declines, providing a bullish backdrop for stocks, strategists said.
Another big check on the health of the economy looms on Friday with the release of the October jobs report. Consensus expects the U.S. economy to add 110,000 jobs in October, down from 254,000 in September.
COLLEGE STATION, TEXAS – OCTOBER 26: The American flag is raised over the stadium before the Texas A&M Aggies vs. LSU Tigers game at Kyle Field on October 26, 2024 in College Station, Texas. (Photo by Tim Warner/Getty Images) · Tim Warner via Getty Images
Josh Schafer is a reporter for Yahoo Finance. Follow him on X @_joshschafer.
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