Third-quarter GDP rose 3.5%, surpassing the median expectation of 3.0% on Bloomberg, and pulling the average growth rate up from 1.25% in the first half of the year up to 2% over the first nine months of the year. In the details, consumption rose 1.8% in Q3 just shy of the 1.9% rise expected, but a noticeable pullback from a 2.5% spending pace in Q2.
Overall the GDP growth report matches expectations and offers no consumer shocker, and as such signs of positive growth for 2014 are soothing investors’ wounds incurred in the recent week, sending bond yields marginally higher in response.
The International Monetary Fund raised its forecast for global growth this year as expansions in the U.S. and U.K. accelerate, and urged advanced economies to maintain monetary accommodation to strengthen the recovery.
Factory output rose less than forecast in September and contract signings for U.S. home purchases fell the most in three years, showing the economy was having trouble gaining traction before the government shutdown.