GDP Growth for Q3 2024 Estimated at 2.8% Amid Strong Spending
Gross domestic product (GDP) for Q3 2024 rose at a 2.8% annualized pace, slightly below the expected 3%. This growth, driven by strong consumer and government spending, indicates a potential soft landing in the economy.
The GDP figure was supported by a personal consumption increase of 3.7%, marking the strongest quarter since early 2023. The quarterly personal consumption expenditures (PCE) index increased by 1.5% annually, down from 2.5% in Q2. The monthly PCE index for September will be released soon.
Prior to this report, the Atlanta Fed’s GDPNow model revised its Q3 estimate down from 3.3% to 2.8%. Analysts like Kathy Jones from Charles Schwab characterized the numbers as indicative of a soft landing, while James Bullard, former St. Louis Fed president, suggested a declaration of a soft landing is appropriate.
Attention will focus on upcoming PCE numbers and the US employment report, especially following the JOLTS data showing job openings fell to their lowest level since early 2021, decreasing to 7.44 million from 7.89 million in August, below the expected 8 million. Tom Essaye from Sevens Report Research noted that while the JOLTS report does not negate the soft landing thesis, it raises concerns about slowing job openings.
Markets currently show a 96% likelihood the Federal Reserve will implement a 25-basis point interest rate cut next month, according to CME Group data.