US Advance GDP Price Index q/q

The economy US is absolutely crushing it and this reinforces portraying the FOMC as being on hold for some time in the wake of yesterday’s decision. Key here is what is under the hood. US consumer spending grew rapidly and so did final domestic demand as a measure of underlying momentum in the domestic economy. GDP disappointed a touch, but only in relation to lagging estimates before we got yesterday’s inventory and net trade balance figures and inventory shedding isn’t necessarily a bad thing. A strong demand side and weak ...

The initial estimate of fourth quarter U.S. GDP growth came in at 2.3% annualized, down from 3.1% in the third quarter. This was near our estimate of 2.2%, but below the consensus forecast looking for a 2.6% pace. It was another good year with growth coming in at 2.8% year/year in 2024, just a touch lower than 2023’s 2.9% pace. On a Q4/Q4 basis, GDP growth in 2024 was 2.5%, down from 3.2% in 2023. No matter how you measure it, growth was still running a little hot in 2024—markedly above what most economists consider longer-term ...

Stronger than expected US GDP growth is welcome, but not narrative busting for the Fed’s path to easing. Nor is an upside surprise on Q2 core PCE. I’ll explain why along with the details. Core PCE Surprises Higher Q2 core PCE inflation was hotter than expected at 2.9% q/q SAAR (2.7% consensus and Scotia). This must be due to monthly revisions, but we’ll find out for sure tomorrow. If there were no revisions to available data up to May, then June core PCE would have to be up by about 0.35% m/m SA which seems implausible given what we ...

We’ve had a pretty solid set of US activity numbers today, but it isn’t having a major impact on market expectations for rate cuts, which are increasingly being seen as a done deal. GDP grew an annualised 2.8% in second quarter 2024, a little above our 2.5% forecast and more so against the 2% consensus figure while the core PCE deflator, the Fed’s favoured inflation measure, rose 2.9% annualised versus the 2.7% expectation. This latter figure, which is an improvement on the 3.7% jump in the first quarter, implies that tomorrow's ...

US first quarter GDP growth is an annualised 1.6%, well below the 2.5% consensus expectation, but inflation is hotter with the core PCE deflator up 3.7% annualised versus 3.4% expected. This suggests, assuming no revisions to monthly data, that the core PCE deflator will come in above 0.4% tomorrow rather than the current 0.3%MoM consensus forecast. Unsurprisingly, Treasury yields have pushed higher as if that is the case, it makes a near-term Federal Reserve interest rate cut look even more unlikely. That said, this inflation number ...