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

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1 year 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.

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Brayden Schenn joins brother with 1,000th game

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1 hour ago

February 28, 2025

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Brayden Schenn joins brother with 1,000th game

Associated Press

Feb 27, 2025, 08:59 PM ET

WASHINGTON — Brayden Schenn played his 1,000th regular-season NHL game when he and the St. Louis Blues beat the Washington Capitals 5-2 on Thursday night.

Older brother Luke played his 1,000th game Oct. 17 with the Nashville Predators. The Schenns are the eighth set of brothers to each reach that milestone and the first to do so in the same season.

“I’ve always said you don’t get there without the help of tons of people,” Brayden said after his team’s morning skate. “Family being one and coaches and players and teammates and people in the organization. Obviously, you have to embrace the day-to-day grind of the ups and downs and just how hard this league is, but, yeah, pretty special that we have best buddies that push each other every day and get to do it in the same year.”

Blues players celebrated the occasion with Schenn shirts and hats with the captain’s No. 10 on them. Father Jeff gave a pregame speech in the locker room after coach Jim Montgomery said, “Schenner and his bro both getting 1,000 games in the same season is a tribute to the great family raised by Jeff and his wife.”

Jeff Schenn said Brayden was his favorite player on the Blues and tied for his favorite overall, of course, with Luke.

“Honored and privileged and very proud to be part of the big day and the big journey that goes along with it,” their dad said. “You see the hard work and the dedication and the bumps and the bruises and everything you guys put into it. … Just so excited and happy to be here and awful proud of him.”

Montgomery said after the win that Jeff Schenn looked very comfortable speaking in front of the group.

“Jeff and his wife, Brayden’s parents, they raised four great kids and two have played 1,000 games in the NHL,” Montgomery said. “His message was well-received, and you could tell by our start that we wanted to play for our captain.”

Dylan Holloway, who scored twice, said because it was Schenn’s 1,000th game, the Blues “wanted this one bad.”

The Capitals acknowledged the milestone with a message on arena videoboards and an announcement during the first period.

Brayden getting to 1,000 comes amid talk ahead of the March 7 trade deadline that teams are interested in acquiring both of them in separate moves. The Blues are on the fringe of the playoff race in the Western Conference, while the Predators are far out of contention.

“The times I’ve gotten traded, I didn’t expect to get traded, so you really never know,” Brayden said, adding he has loved his time with St. Louis. “It’s a business and that just comes with the flows of kind of where we’re positioned, five points out of the playoffs. But it’s the trade deadline, so some people make rumors. … You just take it a day at a time and just focus on your game and play.”

Brayden, 33, has three years left on his contract at an annual salary cap hit of $6.5 million. Luke, 35, has one more season left after this one at $2.75 million.

The Schenn brothers have played together in the NHL before, spending 3½ seasons with the Philadelphia Flyers from 2013 to 2015. Brayden won the Stanley Cup with the Blues in 2019, then Luke back to back with the Tampa Bay Lightning in 2020 and 2021.

Sports

Pens’ Bunting out indefinitely after appendectomy

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1 hour ago

February 28, 2025

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Pens' Bunting out indefinitely after appendectomy

Field Level Media

Feb 27, 2025, 02:49 PM ET

Pittsburgh Penguins forward Michael Bunting is out indefinitely after undergoing surgery to remove his appendix.

“He’ll be out here for the next little while,” Penguins coach Mike Sullivan said Thursday. “I don’t know the time frame at this point, but that’s that.”

Bunting notched an assist in Pittsburgh’s 6-1 setback to the Philadelphia Flyers on Tuesday. He has 29 points (14 goals, 15 assists) and a minus-18 rating in 58 games this season.

Bunting, 29, has totaled 210 points (90 goals, 120 assists) and a plus-10 rating in 326 career games with the Arizona Coyotes, Toronto Maple Leafs, Carolina Hurricanes and Penguins.

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Bruins F Frederic (lower body) week-to-week

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1 hour ago

February 28, 2025

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Bruins F Frederic (lower body) week-to-week

Field Level Media

Feb 27, 2025, 12:36 PM ET

Boston Bruins forward Trent Frederic is considered week-to-week with a lower-body injury, the team announced.

Frederic sustained the injury during the Bruins’ 5-4 overtime loss to the Toronto Maple Leafs on Tuesday. The timing of the injury is significant for Frederic, who is considered an attractive candidate to be shopped ahead of the NHL trade deadline on March 7.

A pending unrestricted free agent, Frederic has 15 points (eight goals, seven assists) and a minus-14 rating in 57 games this season.

Those totals are a far cry from his career season in 2023-24, when he totaled 40 points (18 goals, 22 assists) and a plus-9 rating in 82 games.

Frederic, 27, has totaled 109 points (55 goals, 54 assists) and a plus-20 rating in 337 career games since being selected by the Bruins with the 29th overall pick of the 2016 NHL Draft.