GDP report shows US economy grew a strong 4.9% in the latest quarter as Fed mulls rate hikes

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2 years ago

October 27, 2023

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The US economy grew a stellar 4.9% from July through September, driven by robust consumer spending despite the Federal Reserve’s efforts to slow the economy with high-interest rates.

Thursday’s estimate from the Commerce Department showed that the nation’s gross domestic product — the broadest gauge of the economy’s total output of goods and services — was the fastest quarterly advance in nearly two years.

Last quarters robust GDP growth was far above the 2.1% growth rate in the April-to-June quarter.

Despite inflation, the Commerce Department reported that Americans drove the economy by stepping up their spending, splashing out on everything from movies and Taylor Swift concert tickets to restaurant meals.

However, the economy is expected to experience a steady slowdown in the current October-to-December quarter and into early 2024, especially if the Fed implements another interest rate hike and the housing market remains sluggish.

A recent survey by CNBC-Morning Consult showed just that, with more than three-quarters of respondents, 76%, saying they plan to be frugal through the holidays.

Of the 4,403 US adults polled last month, 62% said they plan on budgeting sometimes or more often in the upcoming six months, CNBC found — during retailers all-important holiday shopping season.

On top of sky-high borrowing rates currently plaguing the housing market — the average long-term rate hit 8% for the first time since 2000 last week, per Mortgage Daily News — some 30 million Americans began repaying student loans, which could slow their ability to spend in the fourth quarter.

Those loan repayments had been suspended since the pandemic first struck three years ago.

Brisk consumer spending typically leads companies those that sell physical goods as well as those, like restaurants and entertainment venues, in the economys vast service sector to raise prices, thereby fueling inflation.

Fed officials have acknowledged the pickup in growth, which could potentially undercut their efforts to fight inflation, which rose 3.7% in September.

Last month’s advance was more than economists expected — and a sharp decline from June 2022’s four-decade high of 9.1% — though it’s still well above central bankers’ 2% goal.

A blockbuster September employment report revealed that the US economy added a whopping 336,000 jobs last month an unexpected surge that contradicts the notion the Fed may tamp down its aggressive tightening regime.

However, it still remains unclear whether the latest GDP figure will have much impact on the Fed’s upcoming Nov. 1 decision on interest rates, which officials have suggested may increase one more time ahead of the new year.

Fed Chari Jerome Powell said in a discussion at the Economic Club of New York last week: “We certainly have a very resilient economy on our hands.”

“Many forecasts called for the US economy to be in recession this year. Not only has that not happened; growth is now running for this year above its longer-run trend. So thats been a surprise,” he added.

If those trends continue, it could allow the Fed to achieve a highly sought-after soft landing, in which the central bank would manage to slow inflation to its 2% target without causing a deep recession.

At the same time, Powell has suggested that if the economy keeps growing robustly, the Fed might have to raise rates further. Its benchmark short-term rate — which affects the rates on many consumer and business loans — currently sits between 5.25% and 5.5%, a 22-year high.

Last month, Fed officials unanimously decided to hold the record-high rate steady for the second time in six policy meetings so far this year.

“Additional evidence of persistently above-trend growth could put further progress on inflation at risk and could warrant further tightening of monetary policy,” Powell said last week.

With Post wires.

US

Charlie Kirk posthumously awarded Presidential Medal of Freedom by Donald Trump

Published

3 hours ago

October 15, 2025

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Charlie Kirk posthumously awarded Presidential Medal of Freedom by Donald Trump

Charlie Kirk has been posthumously awarded the Presidential Medal of Freedom by Donald Trump.

The USA’s highest civilian honour was received by the conservative activist’s widow, Erika, at the White House.

Mr Kirk, 31, was fatally shot on 10 September while speaking at an event at Utah Valley University.

He founded Turning Point USA and toured American university campuses, debating students about current affairs.

Addressing those attending the ceremony in the White House rose garden, the US president said they were there to “honour and remember a fearless warrior for liberty” and a “beloved leader who galvanised the next generation”.

He said Mr Kirk’s name was being entered “forever into the eternal roster of true American heroes”.

Mr Trump described Charlie Kirk as an “American patriot of the deepest conviction, the finest quality and the highest calibre”.

He said his nation had been “robbed” of an “extraordinary champion”.

And Mr Trump said Mr Kirk was assassinated in the “prime of his life for boldly speaking the truth, for living his faith, and relentlessly fighting for a better and stronger America”.

The ceremony coincided with what would have been Mr Kirk’s 32nd birthday.

Mr Trump described Erika Kirk, now head of Turning Point USA, as someone who had “endured unspeakable hardship with unbelievable strength”.

A 22-year-old man, Tyler Robinson, from the city of Washington in Utah has been charged with Mr Kirk’s murder. Prosecutors said they would seek the death penalty.

At a memorial event held at a stadium in Arizona, Erika Kirk told an enormous crowd she forgave her husband’s killer.

“The answer to hate is not hate,” she said.

US

Grammy-winning R&B and soul star D’Angelo dies after ‘prolonged battle with cancer’

Published

3 hours ago

October 15, 2025

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Grammy-winning R&B and soul star D'Angelo dies after 'prolonged battle with cancer'

Grammy-award winning R&B and soul singer D’Angelo has died following a battle with pancreatic cancer, his family has said.

He died on Tuesday, leaving behind a “legacy of extraordinarily moving music” following a “prolonged and courageous battle with cancer,” his family said in a statement.

The prominent musician, born Michael D’Angelo Archer, was 51 years old.

A family statement said: “We are saddened that he can only leave dear memories with his family, but we are eternally grateful for the legacy of extraordinarily moving music he leaves behind.

“We ask that you respect our privacy during this difficult time, but invite you all join us in mourning his passing while also celebrating the gift of song that he has left for the world.”

The singer rose to prominence in the 1990s with his first album, Brown Sugar.

The track “Lady” from that album reached No. 10 in March 1996 and remained on Billboard’s Hot 100 chart for 20 weeks.

Entertainment

Stars of sumo head to London’s Royal Albert Hall – and noodles sell out

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4 hours ago

October 15, 2025

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Stars of sumo head to London's Royal Albert Hall - and noodles sell out

They’re getting through 70kg of rice a day and the wholesaler has run out of noodles. Yes, Sumo returns to London on Wednesday.

It’s just the second time a Grand Tournament has been held outside of Japan – and this is a sport that has records going back more than 1,500 years.

It’s 34 years since the Royal Albert Hall hosted the only previous such event on foreign soil – and the appetite for tickets meant all five days sold out immediately.

Much of the focus is on the two grand champions or yokozuna, the 74th and 75th men to attain the rank.

They’re the Mongolian Hoshoryu Tomokatsu, plus Japan’s Onosato Daiki – who this year became the quickest wrestler to achieve the rank in the modern era.

“I’m happy that Sumo is back after so many years,” Onosato said. “I hope I can show the UK fans how fantastic Sumo is.”

“Being a yokozuna has a lot of responsibility,” Hoshoryu told Sky Sports. “We have to show everyone an example of what a yokozuna is – and that’s very difficult.

“My uncle was a yokozuna – and I’m happy to follow in his footsteps. But I came here to London as a yokozuna which he didn’t, so I’m even happier.”

The two are already great rivals.

At the recent Aki Basho – the most prestigious tournament on the sumo calendar – the pair finished with identical records after 15 days of bouts.

It all came down to a final play-off between the two yokozuna – the first time that had happened in 16 years. It was Onosato who came out on top on that occasion.

Hoshoryu says he is a big fan of basketball and football. He follows Chelsea, although his favourite players are going back a bit: “Didier Drogba and Petr Cech. He’s the ‘keeper. I like this guy!”

Early starts and a hearty stew: The life of a rikishi

The wrestlers – or rikishi – have a rigorous training regime.

They live in communal blocks called stables and practice starts early. Perhaps surprisingly, everyone skips breakfast. After training and practice – and for the younger rikishi, chores – the wrestlers all eat together.

The staple of their diet is chankonabe, a hearty stew packed with meat and vegetables. The feeding of the 40 rikishi who have come over for the five-day tournament is a challenge in itself.

Donagh Collins, the CEO of co-organisers Askonas Holt, said: “We are going through 70 kilos of rice a day. Somebody told me that the wholesaler for the noodles has run out of noodles. We’re really pushing the system here.”

The ring – or dohyo – is just 4.55m in diameter and quite small when two giant wrestlers leap at each other.

The aim of the fights is to either get your opponent onto the floor – or, more spectacularly, shove or hurl them out of the dohyo, so spectators in the ringside seats may be getting extremely up-close to the wrestlers.

The last time the tournament was in Britain, the massive Konishiki, known as the Dump Truck, took centre stage.

The giant Hawaiian was the heaviest-ever rikishi coming in at 287kg – or 45 stone. That’s a lot of wrestler to dodge if he comes falling out of the ring towards you.

The Royal Albert Hall may be firstly a concert venue, but it has hosted the likes of John McEnroe, Lennox Lewis and even Muhammad Ali.

And for the next five days, the cream of the world of sumo will be thrilling the crowds – provided a new noodle supplier is found.

What is a yokozuna?

Yokozuna is the highest rank in sumo, with its name meaning “horizontal rope” and refers to the rope worn around a competitor’s waist as they enter the ring.