Prior to the US stock market on Thursday (October 26th), the latest data released by the US Department of Commerce's Bureau of Economic Analysis showed that the US economy grew faster than market expectations in the third quarter.
Specific data shows that the initial estimated real gross domestic product (GDP) of the United States in the third quarter increased by 4.9% year-on-year (YoY), which is more than twice the 2.1% in the second quarter and the highest level since the fourth quarter of 2021 (7.0%). The market originally only expected to increase to 4.3%.
The US Department of Commerce usually estimates quarterly economic data three times based on continuously improving information, and the revised values (second estimate) for this data will be released on November 29th.
Unlike other countries, the United States uses the annualized quarterly rate of real GDP as the most commonly used indicator of economic growth, as it is believed to better reflect economic trends. If traditional year-on-year growth is used, the year-on-year growth rate of US GDP in the third quarter is 2.9%, setting a new high since the first quarter of 2022.
In the sub data, the initial actual personal consumption expenditure in the third quarter of the United States increased by 4.0% year-on-year (YoY), stronger than the 0.8% in the second quarter and consistent with market expectations.
In addition, the core PCE price index increased by 2.4% year-on-year (YoY), lower than market expectations of 2.5% and 3.7% in the previous quarter. This key data indicates that even in a hot consumer environment, the high interest rates of the Federal Reserve still partially limit the upward pressure on prices.
Analysis suggests that the US economy has grown at its fastest pace in nearly two years, once again ignoring recession warnings, as the tight labor market has led to wage increases, helping to boost consumer spending. Although this strong economic growth is unlikely to continue, it proves the resilience of the economy.
Looking ahead, growth in the fourth quarter of the United States may slow down due to the UAW strike and the resumption of student loan repayments by millions of Americans. However, most economists have revised their predictions and believe that the Federal Reserve can achieve a "soft landing" for the economy.
Two other sets of data released at the same time also brought good news: durable goods orders in the United States rose 4.7% month on month in September, almost three times the market's expected growth rate. Transportation equipment orders rebounded 12.7% after two consecutive months of decline, indicating that the outlook for the US manufacturing industry is improving.
Last week, the number of people applying for unemployment benefits for the first time recorded 210000, an increase of 10000 from the adjusted 200000 in the previous week, higher than the market's original expectation of 208000 people.