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EH Update: Current Economic Events
- Real GDP increased at an annualised rate of +1.5% q/q in Q3, compared with +3.9% in Q2.
- Consumption was up +3.2% and, after stripping out inventories, GDP increased by +3%. Investment contracted by a sharp -5.6%, while core inflation increased by only +1.3% annualised.
- As expected, the Federal Reserve announced that the Fed Funds rate was left unchanged at 0%. The accompanying statement had a subtle mix of slightly more hawkish and dovish changes but a more significant change was that the Fed explicitly mentioned the “next meeting” as a potential time for liftoff, a possibility markets had heavily discounted beforehand.
- Even so, other recent data have been weak. Consumer confidence dropped -5 points to 97.6, with respondents indicating that there were fewer jobs available and that they were harder to get. Durable goods orders fell -1.2% m/m, the second consecutive loss, and by -3% y/y. Orders for non-defence capital goods (ex-aircraft) also fell for a second month and contracted by -7.3% y/y.
- Housing data were mixed in September as existing home sales increased by +4.7% m/m while new home sales, likely affected by a +13.5% y/y price increase, dropped -11.5%.