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Gross domestic product came in marginally softer than expected for the third quarter of 2024, but the pace of growth still indicates that a soft landing is within reach — or, according to some analysts, already here.
GDP in the third quarter rose at a 2.8% annualized pace, according to advanced estimates, coming in just below expectations of 3%. The figure was boosted by strong consumer and government spending. Personal consumption increased to 3.7% during Q3, marking it the strongest quarter since the beginning of 2023.
Quarterly personal consumption expenditures index increased 1.5% annually vs. 2.5% during the second quarter. The monthly PCE index for September is scheduled to be published tomorrow.
Today’s GDP reading comes after the Atlanta Fed’s GDPNow model lowered its third quarter estimate from 3.3% to 2.8% Tuesday.
Kathy Jones, chief fixed income strategist at Charles Schwab, called Wednesday’s figures “soft landing numbers.”
James Bullard, former president of the St. Louis Fed, told CNN earlier this month he thought we should already “declare a soft landing.”
I’ll hold off on making any declarations for now. Tomorrow’s PCE numbers and Friday’s US employment report are going to be very telling. Plus, the JOLTS data we got yesterday doesn’t paint the prettiest picture.
The JOLTS report showed that US job openings in September fell to the lowest point since the beginning of 2021. Available positions also declined to 7.44 million from 7.89 million in August, missing economists’ expectations of 8 million.
Tom Essaye, founder of Sevens Report Research, said the report “was not enough to derail the soft landing thesis by itself, but it was a step in that direction as investors will want to start seeing the decline in headline job openings slow as part of a soft landing dynamic and still-healthy labor market.”
Like I said, the September jobs report is going to be key.
Markets are, unsurprisingly, still all but certain (96% sure) the Fed will opt for another 25-basis point interest rate cut next month, according to data from CME Group.
