GDP Surprises at 4.9%

Posted on 10/28/2023

U.S. gross domestic product (GDP) came in at 4.9% for Q3. The growth figures for the third quarter of 2023 revealed that federal, state, and local governments increased their spending. The strong contribution from inventory growth may fade as the U.S. moves into the fourth quarter.

That is a major surprise to the upside. Estimates were 4.3%. 4.9% is over twice Q2 GDP of 2.1%. Consumers showed a continued willingness to shop despite having US$ 1 trillion in credit card debt. Americans paid US$ 130 billion in fees last year, a rate that is likely to be shattered this year.

U.S. Treasury yields stabilized this week following the recent sell-off. 10-year Treasury yields declined modestly over the week but remained close to the 5% level.

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