Third quarter GDP was published today at 4.3% growth rate. That’s a solid percentage point above expectations and a half percent higher than second quarter. Averaging the first three quarters of 2025 we get an average of 2.5% growth rate for the economy. Still higher than the 2.0% target rate, but not by much. It will be interesting to see how the fourth quarter shakes out. GDP has exploded this year, going from -0.6% to 3.8% to 4.3% in succession.
The headline PCE and Core PCE also expanded from 2.1% to 2.8% and from 2.6% to 2.9%, respectively. Headline CPI was also last seen at 2.8%. The prices consumers are paying are definitely on the rise, but one wonders if rising unemployment will chop down both growth and price inflation at the knees or not, and how long it may take to see results. We’ll see what next quarter brings.
