U.S. Economy Posts Surprisingly Strong Growth

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Meanwhile, here are the major economic headlines from the last week:

• The U.S. economy grew at a faster-than-expected rate in the third quarter with gross domestic product expanding 4.9 percent between the third quarter of 2022 and the third quarter of 2023. The increase marked the fastest pace of U.S. growth in nearly two years. Higher consumer spending, government spending, inventories, and exports drove the expansion.
• U.S. personal incomes increased 0.3 percent from August 2023 to September 2023 while personal consumption expenditures — the Federal Reserve’s preferred gauge of inflation — jumped 0.7 percent.
• S. regional manufacturing readings were mixed this month. The Federal Reserve Bank of Kansas City said Midwest activity continued to decline and expectations for future activity stayed mostly flat. Specifically, the monthly composite index was -8 in October, unchanged from September, but down from zero in August. Durable goods manufacturing fell more than nondurable goods and the production, shipments, and order backlog indexes all declined moderately, while new orders fell significantly. Read the full report here. The Federal Reserve Bank of Richmond, meanwhile, said manufacturing activity in the mid-Atlantic region expanded for a second consecutive month in October, though the rate of expansion slowed. The index was at +3, down two points from September. Shipments rose, but new orders fell and employment was flat. Local business sentiment was sluggish, and the current conditions and the six-month outlook fell below zero. Read the full report here.
• During the week that ended October 21, 2023, 210,000 individuals filed for U.S. unemployment benefits for the first time ever, a 10,000 increase from the previous week. The four-week moving average of first-time claims also rose, as did the number of people who continued to receive jobless benefits. That figure jumped to 1.79 million during the week that ended October 14, up from 1.727 million the week before. The four-week moving average of continuing claims also increased.
• In other economic news: the Federal Reserve Bank of Chicago’s National Activity Index rose 0.02 percent in September due to the fact that all four indicators (production and income; employment, unemployment, and hours; personal consumption and housing; and sales, orders, and inventories) all improved. Also: the number of new homes sold in the United States increased 12.3 percent from August 2023 to September 2023 and 33.9 percent between September 2022 and September 2023.