GDP Accelerated in the Third Quarter
The initial, or advance, estimate of gross domestic product showed the economy accelerated at an annualized rate of 4.9% in the third quarter, well above the 2.1% advance in the second quarter. While the initial estimate is based on incomplete source data, it certainly shows economic strength despite rising interest rates. The largest contributor to the increase in third-quarter GDP was a 4.0% increase in personal consumption expenditures (consumer spending), which ticked up 0.8% in the second quarter.
Government Deficit Increased in Fiscal Year 2023
The government budget for September, the last month of fiscal year 2023, had a deficit of $171.0 billion. Receipts totaled $467.0 billion, while government outlays equaled $638.0 billion. For fiscal year 2023, the total government deficit increased to $1.695 billion, up from $1.375 billion for the previous fiscal year. Government outlays totaled $6.134 billion for this fiscal year, while receipts were $4.439 billion.
Eye on the Week Ahead
November kicks off with a meeting of the Federal Open Market Committee (FOMC). The FOMC projected one more 25-basis-point increase by the end of the year. The Committee did not raise interest rates at its last meeting in September, so it is likely that another interest rate hike is in the offing following the November meeting or the last meeting of the year in December. Also, out this week are the employment figures for October. Job hirings have been steady throughout the year, with September’s revised figure coming in at 336,000, well above the monthly average of 267,000.