US Q3 real GDP expanded 3.4% annualized, beating 3.2% forecast, while core PCE inflation held at 3.1% for September.
Macro & Markets ·
The US economy expanded faster than anticipated in the third quarter, with real GDP growing at a 3.4% annualized rate, exceeding the 3.2% consensus forecast and accelerating from 2.2% in the prior quarter. Core inflation metrics sent mixed signals: the annualized core PCE for Q3 reached 2.5%, above the 2.4% estimate but declining from 3.3% previously. September's monthly core PCE printed at 0.3%, matching expectations, while the year-over-year core PCE rate held steady at 3.1%.
The stronger-than-expected growth came as price pressures moderated quarter-over-quarter yet remained elevated in annual terms. September's annual core PCE edged up from 3.0% in the prior month, suggesting inflation stabilized near recent levels despite the quarterly deceleration. Analysts observed that GDP beat expectations while inflation readings aligned with market consensus.
What remains unclear is whether this pace of growth and inflation trajectory will persist into the fourth quarter and beyond, or whether the sequential slowdown in core PCE signals a meaningful disinflationary trend.