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The US economy is expected to have experienced its most rapid growth in nearly two years during the third quarter, demonstrating the country’s economic resilience despite high interest rates.
Economists surveyed by LSEG anticipate that strong consumer spending will result in a 4.3% annualized rise in gross domestic product.
This would surpass the 2.1% rate achieved in the second quarter and mark the highest figure since the fourth quarter of 2021.
Preliminary figures will be released by the commerce department at 8.30 am Eastern Time on Thursday.
This data coincides with the Federal Reserve’s upcoming meeting to determine interest rates, as the central bank strives to bring inflation back to its 2% target without negatively impacting the economy.
Given that the GDP figures are historical in nature compared to monthly data such as inflation and payrolls, they are unlikely to significantly influence next week’s decision.
The general expectation is that the Federal Reserve will maintain rates at a 22-year high to allow policymakers more time to evaluate the impact of prior rate increases and recent events such as the bond market’s sharp decline.
Nevertheless, these growth statistics will reinforce the long-term strength of the economy and reinforce the anticipation of sustained elevated interest rates.
Longer-term 10- and 30-year Treasuries, which have experienced significant declines in recent weeks, are particularly sensitive to growth projections.
Positive GDP numbers can also influence consumer and business sentiment, potentially affecting behavior and inflation expectations.
While certain sectors of the economy have been impacted by rising interest rates, particularly the housing market, consumer spending has proven to be more resilient than anticipated by economists.
Strong retail sales data earlier this week briefly elevated the 10-year Treasury yield to a 16-year high.
