In October, the U.S. Bureau of Economic Analysis released their third quarter gross domestic product report, showing the economy grew at a 3.5% annual rate, faster than the 3.4% expected rate. The growth comes on the heels of strong consumer spending of 4.0% and low inflation of 1.6%, as provided by the Personal Consumption Expenditures (PCE) price index. The report comes out as concerns continue to escalate regarding rising interest rates and tightening trade restrictions.
In labor markets, the unemployment rate held constant from September, while 250,000 jobs were added, suggesting that a significant number of individuals had entered the labor force last month to meet the new demand. Finally, wage growth has eclipsed the 3.0% mark, a first in over nine years. The additional wages may have driven retail spending growth in September, as well as overall consumer spending, as highlighted in the new GDP figures.
The Federal Reserve also released one of their eight Summaries of Commentary on Current Economic Conditions, or Beige Books, for the year. The publication highlights economic conditions and outlooks for each of the twelve Fed districts, as well as the national picture. October’s edition noted overall economic expansion with a majority of the districts reporting modest to moderate growth. The Book also noted labor market expansion across many districts, with employers experiencing difficulties finding qualified workers, restraining growth in some sectors requiring high skill. Also, the Beige Book writes that prices continued to rise at moderate rates across all twelve regions.
Sources: Commerce Department, Department of Labor, Federal Reserve, National Association of Home Builders, major automaker reports
The highlights from our weekly economic updates during October 2018 included: