The United States GDP figures greatly beat analyst estimates of two percent by increasing in the third quarter by 2.8 percent, according to the Commerce Department. US COnsumer spending increased 1.5 percent, the lowest since 2011.
“Growth is steady but not that great,” said Jonathan Basile, an economist for Credit Suisse.
Household spending added one percentage point to the growth figures, and final sales, excluding inventories, increased two percent in the third quarter. This was down .1 percent from the following quarter.
The increase in residential construction increased 14.6 percent at an annualize rate and added .4 percentage points to growth, while a decrease in corporate spending on equipment declined 3.7 percent at an annualized pace, subtracting .2 percentage points from the figure.
Local and state government spending increased by .2 percent, while spending at federal agencies declined 1.7 percent.
Inflation will remains controlled and increased 1.4 percent at an annualized rate, excluding food and energy costs.
However, the labor market still is an issue for the US economy. Today’s unemployment claims report were inline with expectations of 336K, but this seems to be the norm with unemployment claims not falling. The previous reading for unemployment claims was revised up to 345K from 340K.
The number of initial claims under state programs increased by 4,222, unadjusted, to 327,974 for the week ending on November 2. Individuals on emergency unemployment compensation benefits for the week ending on October 19 increased 64,837 from the prior week to reach 1,379,774 people claiming EUC.