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U.S. GDP Rebounds in Q3, But Slower Growth Likely
Real GDP increased by an annualized 2.6% in the third quarter, reversing the declines posted in 2022’s first half and allaying concerns about a recession, Marcus & Millichap reported. However, the firm’s latest research brief points to a likely slowdown ahead.
“This turnaround was predominantly driven by improved net external trade, as exports rose 14.4% and imports fell 6.9%, a dynamic that is unlikely to continue,” according to Marcus & Millichap. “Economic concerns abroad and a strong U.S. dollar will weigh on export activity, while the drop in imports — a benefit to the GDP calculation — is nevertheless a signal of weakening domestic consumer demand.”
Other GDP contributors fell, notably a 26.4% drop in fixed residential investment. “Paired with less anticipated government spending, these signals point to more temperate GDP growth in the coming quarters,” the research brief states.
The research brief also predicts slower growth in the federal funds rate, noting that the Federal Reserve is likely to implement a fourth consecutive 75-basis-point hike in the overnight lending rate in November, but hold December’s increase to 50 bps.
- ◦Financing
- ◦Economy
