US GDP grows 3.4% in the third quarter and exceeds forecasts; Fed remains cautious about interest rates

The United States economy surprised in the third quarter. According to CNBC, Gross Domestic Product increased 3.4% in annualized terms, above the 3.1% estimate and well ahead of the 2.2% in the second quarter. For MarketWatch, it is the strongest pace in almost three years, and the agency attributes part of the performance to artificial intelligence and the wealth effect.

The result was supported internally. Family consumption rose 3.8%, the same pace as the previous quarter, while gross private investment jumped 19.4%, driven by equipment, up 20.9%. Real sales to private domestic buyers increased 4.9%, compared to 4.6% in the second quarter.

Inflation, in turn, does not alone confirm the acceleration suggested by the original headline. According to CNBC, the PCE index rose 0.5% in September, in line with the Dow Jones consensus, and accumulated 3.6% in twelve months, below the 3.7% expected. The core advanced 0.3% in the month and 3.1% in the year, also according to consensus. In the quarterly comparison, prices rose 2.1% in total and 2.5% in the core, compared to 5% and 3.3% in the second quarter. The data was released by the BEA on Thursday (29).

In monthly consumption, the numbers were slightly lower than expected. Consumer spending rose 0.5% in September, compared to a forecast of 0.6%, and personal income increased 0.2%, compared to an expected 0.3%. Also according to CNBC, initial unemployment insurance claims totaled 194 thousand in the week ending October 24, below the estimate of 200 thousand.

At the Federal Reserve, the decision was to keep interest rates between 3.75% and 4%. According to CNBC, the institution's president, Kevin Warsh, stated that he will evaluate the available data before making any further moves. The signal is caution, with the next decision subject to new readings.

In Brazil, the agenda also includes relevant indicators. The market expects the opening of 150,000 vacancies in September's Caged, and FGV's October IGP-M should rise 1.25% in the month, according to projections cited by InfoMoney. In the American case, the expectation was for growth of 3% in the quarter, and the data came out above that.

What changes for the investor

A strong GDP, with stable inflation in the quarter and maintained interest rates, reduces the rush for cuts in the short term, but the path remains open and dependent on data. For those who follow the stock market, Nasdaq, interest rates and the dollar, the central point is that the Fed tends to react to a sequence of numbers, and not to a single quarter. As growth came with the weight of private investment, the possible effect on sectors linked to technology and productivity deserves attention, as does the growing demand for results. In the liberal vision that guides this newspaper, private investment is a healthier basis for growth than public spending, and this is the most favorable data in the report.

Automatically translated from Portuguese.