US DATA
- Real GDP growth in the Q3 advance report technically came in below expected at 2.8% annualized (cons 2.9) although it was in line with the Atlanta Fed’s GDPNow and importantly kept to the GDPNow’s healthier breakdown.
- In particular, personal consumption increased 3.7% (cons 3.3) after 2.8%. That meant a quarterly GDP contribution of 2.46pp for very close to the 2.43pp that GDPNow was tracking, as consumption did indeed see its strongest quarter since 1Q23.
- Net trade did indeed see a large drag, but less so than in Q2 (-0.56pp after -0.9pp), and encouragingly for signs of domestic demand real imports surged 11% annualized (dragging -1.5pps from GDP after -1.0pp in Q2). We have noted previously that monthly trade data show capital and consumer goods imports growing very strongly, with the former likely benefiting from onshoring.
- The flip side to stronger contributions from final domestic demand and net trade was an unusually strong boost from changes in inventories disappearing in Q3, with -0.2pp after 1.1pp.
- Coming in close to GDPNow estimates should partly limit the market reaction to the stronger consumer spending figures.
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