The anticipation is building as the release date for the Q3 Gross Domestic Product (GDP) growth figures for the U.S. economy draws near. Scheduled for announcement at 8:30 am E.T. on October 26, the advance estimate has economists and analysts on the edge of their seats, eagerly awaiting the results. Recent nowcasts from the Atlanta Federal Reserve's GDPNow project a potential annualized real GDP growth rate of over 5%, while professional economists are predicting growth to surpass 3% after a series of upward revisions in the past few weeks. Even if the more conservative 3% forecasts hold true, it would still be an impressive rate of growth compared to previous quarters.[0]
The median forecast for Q3 GDP growth currently stands at 4.5%, a significant increase from the 2.1% growth recorded in the previous quarter. Economists have also raised their growth projections for the U.S. economy through early 2024, further reducing the odds of a recession and indicating consumer confidence in continued spending.[1]
On October 17, the GDPNow model estimate for real GDP growth in Q3 2023 was revised to 5.4%, up from 5.1% on October 10. This revision was influenced by recent releases from the U.S. Bureau of Labor Statistics, the U.S. Census Bureau, and the Federal Reserve Board of Governors.[2] While there was a slight decrease in the nowcast of third-quarter real gross private domestic investment growth from 6.7% to 6.5%, there was an offsetting increase in the nowcast of the contribution of the change in real net exports to third-quarter real GDP growth, which rose from 0.94 percentage points to 0.99 percentage points. Additionally, the nowcast of third-quarter real personal consumption expenditures growth increased from 3.7% to 4.1%.
If these estimates hold true, Q3 will mark a significant step-up in real annual GDP growth compared to the previous four quarters, which recorded growth rates of just over 2%. The first half of 2022 saw a decline in GDP, making the projected growth for Q3 even more promising.
The Atlanta Fed's GDPNow estimate of 5.4% for Q3 growth surpasses its previous estimate of 5.1%, indicating a positive outlook for the economy. However, it's important to note that the October 26 GDP figure is only the first of three progressively more accurate estimates for Q3 GDP growth from the Bureau of Economic Analysis. Revised estimates will be released on November 29 and December 21, with subsequent revisions potentially adjusting the advance estimate of GDP growth by up to half a percent in either direction, on average.[0]
Despite the uncertainties surrounding the economy, some economists maintain a bullish outlook on its resilience. The ongoing economic resilience has defied earlier warnings of an impending recession, with economist Paul Krugman highlighting the surprising strength and durability of the economy.
As the release date approaches, economists, analysts, and investors eagerly await the Q3 GDP growth figures, hoping for positive news that confirms the economy's upward trajectory. Regardless of the final numbers, the resilience and strength of the U.S. economy in the face of challenges have been a testament to its ability to adapt and recover.
0. “What To Expect From Q3 GDP Growth” Forbes, 23 Oct. 2023, https://www.forbes.com/sites/simonmoore/2023/10/23/what-to-expect-from-q3-gdp-growth
1. “Crypto Markets March Higher Ahead of Busy Economic Week” BeInCrypto, 23 Oct. 2023, https://beincrypto.com/weekly-economic-calendar-market-volatility/
2. “Atlanta Fed GDPNow estimate for 3Q growth came in at 5.4% up from 5.1% previously” ForexLive, 17 Oct. 2023, https://www.forexlive.com/centralbank/atlanta-fed-gdpnow-estimate-for-3q-growth-came-in-at-54-up-from-51-previously-20231017/
