U.S. GDP accelerated at 2.6% pace in Q3, better than expected as growth turns positive
Source: CNBC
The U.S. economy posted its first period of positive growth for 2022 in the third quarter, at least temporarily easing inflation fears, the Bureau of Economic Analysis reported Thursday. GDP, a sum of all the goods and services produced from July through September, increased at a 2.6% annualized pace for the period, against the Dow Jones estimate for 2.3%.
That reading follows consecutive negative quarters to start the year, meeting a commonly accepted definition of recession, though the National Bureau of Economic Research is generally considered the arbiter of downturns and expansions. The growth came in large part due to a narrowing trade deficit, which economists expected and consider to be a one-off occurrence that wont be repeated in future quarters. GDP gains also came from increases in consumer spending, nonresidential fixed investment and government spending.
Declines in residential fixed investment and private inventories offset the gains, the BEA said. Overall, while the 2.6% rebound in the third quarter more than reversed the decline in the first half of the year, we dont expect this strength to be sustained, wrote Paul Ashworth, chief North America economist at Capital Economics. Exports will soon fade and domestic demand is getting crushed under the weight of higher interest rates. We expect the economy to enter a mild recession in the first half of next year.
The report comes as policymakers fight a pitched battle against inflation, which is running around its highest levels in more than 40 years. Price surges have come due a number of factors, many related to the Covid pandemic but also pushed by unprecedented fiscal and monetary stimulus that is still working its way through the financial system.
Read more: https://www.cnbc.com/2022/10/27/us-gdp-accelerated-at-2point6percent-pace-in-q3-better-than-expected-as-growth-turns-positive.html
Yup, pulling this out -
Article being updated.
Last update -
GDP, a sum of all the goods and services produced from July through September, increased at a 2.6% annualized pace for the period, against the Dow Jones estimate for 2.3%.
That reading follows consecutive negative quarters to start the year, meeting a commonly accepted definition of recession, though the National Bureau of Economic Research is generally considered the arbiter of downturns and expansions.
This is breaking news. Please check back here for updates.
Original article -
This is breaking news. Please check back here for updates.
mahatmakanejeeves
(57,659 posts)And good morning.
BumRushDaShow
(129,642 posts)They are in the process of updating now....
I would suppose this may torpedo the "recession" (with this immediate timeframe's "first look" although months from now as revisions come through, that could change).
Seems like a "Goldilocks" amount - not "overheated" and maybe "weak enough" to forestall any large interest rate hikes the next go-around (and instead something like 50 basis points vs another 75).
SheltieLover
(57,073 posts)IronLionZion
(45,554 posts)since we're clearly better for the economy than the tax cut party.
FBaggins
(26,775 posts)Well... ok... 3-6 months ago would have been better.
BootinUp
(47,200 posts)that showed we were not in a recession.
FBaggins
(26,775 posts)Nor does this change the very likely fact that a year from now it will be clear that we have been in one (since economist estimates for the next few quarters are bleak).
But that's not the point. It's simply helpful to get a positive number just before the election.
BootinUp
(47,200 posts)Glad you are not a pundit on tv that would negate the news
FBaggins
(26,775 posts)It isn't uncommon to see some "noise" from quarter to quarter.
The 2008-2009 recession had a quarter just like this one.
Current expectations for next year are -0.5% GDP growth
BootinUp
(47,200 posts)which they probably have, then a recession is likely in the future. Thats all together different than whether we are in one.
FBaggins
(26,775 posts)It doesn't become two separate recessions because there's a short GDP increase between two sets of negative growth.
BootinUp
(47,200 posts)after further necessary analysis that this will be viewed as a double dipper. Rather that economic analysis tools, for estimating, that work fine in more normal environments, will be shown to have been quite misleading over the last year.
JohnSJ
(92,436 posts)BumRushDaShow
(129,642 posts)I still go back to the problem of them not having an "analog" set of combined circumstances to use to base their analysis on. I have speculated that maybe the closest would be looking at the 1917 - 1919 period when you had WWI and a global pandemic, plus some extreme weather events that impacted the ag/livestock sector. Interestingly enough, you also had Prohibition implemented via a Constitutional Amendment in 1917 (later repealed in 1919).
Otherwise they can only try to guess based on whatever other historical trends they have access to.
Johnny2X2X
(19,165 posts)Really, were looking at 75 basis points in November and maybe 50 in December and that will be it. Stocks already have they built into prices. 2.6% is a solid quarter. This is great news.
JohnSJ
(92,436 posts)Johnny2X2X
(19,165 posts)4.25-4.5% by year's end. So that's another point and a quarter. Then they want to keep them about there for all of 2023, maybe a 25 basis point hike at most.
Inflation has likely peaked. We see it come down the next couple months and the Fed will relax and not be opposed to lowering the rates next year if prices are falling to avoid a recession.
BootinUp
(47,200 posts)is more delayed than you realize. But I like your optimism.
Johnny2X2X
(19,165 posts)Fed raising rates now really doesn't work on inflation until next year. There are other factors bringing inflation down right now.
But investors always look forward, they've priced in another 1.25% raise over the next 2-3 months. DOW is up 11% in the last month.
FredGarvin
(485 posts)Economically, this number is not good.
Inflation is crushing consumers.
FBaggins
(26,775 posts)GDP figures are "real" (i.e., already adjusted for inflation)
But yes... inflation is crushing many consumers.
Grins
(7,239 posts)So this is old news.
4th Q ended 30 September so we dont yet have the numbers.
In case you missed it - we are now in the 1st Q of FY 2023!
SWBTATTReg
(22,176 posts)report (in short, hurt the Country in any way they can so they can win).
As to Inflation, another worrisome economic trend, perhaps the slowdown in vehicle and real estate will slow down demand / increase business inventories / leading to businesses trying to stimulate their sales (rebates, etc. to increase consumer demand), etc.
Like the article said though, COVID did a number on the economy.
I also wonder if the incompetence of tRUMP and his administration during his four years in the WH caused things to be worse (I suspect so), since ignoring COVID didn't work (as a lot of red states and their residents found out, COVID-related deaths in red states are significantly more than in blue states).
Fla Dem
(23,779 posts)an equal amount of enthusiastic reporting as the gave doom and gloom reporting about inflation and recession.
Probably not.
mahatmakanejeeves
(57,659 posts)Thu Sep 29, 2022, 08:33 AM: Real gross domestic product (GDP) decreased at an annual rate of 0.6 percent in the second quarter
September 29, 2022
Gross Domestic Product (Third Estimate), GDP by Industry, and Corporate Profits (Revised), 2nd Quarter 2022 and Annual Update
Real gross domestic product (GDP) decreased at an annual rate of 0.6 percent in the second quarter of 2022, following a decrease of 1.6 percent in the first quarter. The second-quarter decrease was the same as previously estimated in the "second" estimate released in August. The smaller decrease in the second quarter, compared to the first quarter, reflected an upturn in exports and an acceleration in consumer spending.
Profits increased 4.6 percent at a quarterly rate in the second quarter after increasing 0.1 percent in the first quarter.
Private goods-producing industries decreased 10.4 percent, private services producing industries increased 2.0 percent, and government decreased 0.2 percent. Overall, 9 of 22 industry groups contributed to the second-quarter decline in real GDP.
Today's release reflects the results of the 2022 Annual Update of the National Economic Accounts.
Read more: https://www.bea.gov/news/2022/gross-domestic-product-third-estimate-gdp-industry-and-corporate-profits-revised-2nd
https://www.bea.gov/news/2022/gross-domestic-product-third-estimate-gdp-industry-and-corporate-profits-revised-2nd
EMBARGOED UNTIL RELEASE AT 8:30 A.M. EDT, Thursday, September 29, 2022
BEA 22-46
Gross Domestic Product (Third Estimate), GDP by Industry, and Corporate Profits (Revised), 2nd Quarter 2022 and Annual Update
Real gross domestic product (GDP) decreased at an annual rate of 0.6 percent in the second quarter of 2022 (table 1), according to the "third" estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP decreased 1.6 percent (same as previously published).
The "third" estimate of GDP released today is based on more complete source data than were available for the "second" estimate issued last month. In the second estimate, the decrease in real GDP was also 0.6 percent. The update primarily reflected an upward revision to consumer spending that was offset by a downward revision to exports. Imports, which are a subtraction in the calculation of GDP, were revised down ( refer to "Updates to GDP" ).
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