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🔥BULLISH

US GDP Growth Hits 3.4%, Beating Forecasts

Core PCE inflation eased year over year from the prior quarter, but September's monthly and annual readings showed prices still advancing.

US real GDP grew at a 3.4% annualized rate in the third quarter, beating the 3.2% forecast and accelerating from 2.2% in the previous quarter. Annualized core PCE inflation was 2.5%, below the prior quarter's 3.3% but slightly above the 2.4% estimate.

Why it matters

The data present a mixed picture for monetary policy: growth was stronger than expected, while September core inflation remained firm. The figures alone do not settle the outlook for interest rates.

Market impact

Monthly core PCE rose 0.3% in September, matching expectations, and the previous month's reading was revised up to 0.3% from 0.2%. Annual core PCE reached 3.1%, in line with consensus and up from 3.0% previously. Markets will weigh resilient growth against the renewed firmness in inflation.

Frequently asked questions

  1. How much did US GDP grow in the third quarter?

    Real GDP expanded at a 3.4% annualized rate, above the 3.2% forecast and up from 2.2% in the previous quarter.

  2. What did the Q3 core PCE reading show?

    The advance annualized core PCE reading was 2.5%, slightly above the 2.4% estimate and below the prior quarter's 3.3%.

  3. How did monthly core PCE change in September?

    Monthly core PCE rose 0.3%, matching expectations. The previous month's reading was revised up to 0.3% from 0.2%.

  4. What was the annual core PCE rate in September?

    Annual core PCE was 3.1%, in line with consensus and up from 3.0% previously.

  5. Why do the GDP and PCE figures give a mixed signal for rates?

    GDP growth beat expectations, signaling resilient economic activity, while September's core PCE readings showed inflation remained firm.

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