"Real GDP grew by 2.6 percent in the third quarter according to the Commerce Department. While net exports was a drag on GDP over the first half of the year, it is now keeping GDP afloat. Residential investment took a nosedive as builders reacted to skyrocketing mortgage rates. The labor market remains tight, helping to maintain consumption. However, consumers are leaning ever more on credit, and inflation continues to outpace wage growth. Overall, this was exactly the type of report the Federal Reserve is looking for. Rate sensitive areas are responding to tightening monetary policy, but the rest of the economy is moderating more slowly. PCE inflation dropped from 7.3 percent in the second quarter to 4.2 percent in the third. It is still too early for the FOMC to think about a pivot, but after next week’s 75 basis-point hike, this report would support a mild a step down to a 50-point increase in December.”
- NAFCU Chief Economist and Vice President of Research Curt Long
Author: Mike Lawson
Married to a most gorgeous and wonderful wife, raising 5 kiddos (including twins!), enjoy helping others tell their stories, and love surfing SoCal waves. Keep it simple.