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.
As Hollywood celebrates the film industry at this weekend’s Academy Awards, not far away from where finishing touches are being put to the red carpet, communities are still coming to terms with the impact of the wildfires which ravaged areas of Los Angeles earlier this year.
Prop master Adam Jette – and his wife and son – lost their home in Altadena.
“Even coming back into the neighbourhood is really, really hard,” he tells Sky News.
“You’re coming back to what it is, which is a disaster site, the whole neighbourhood is gone.”
He says he and others in the same position have no choice but to keep going.
“We all have to keep working in order to support ourselves, in order to have our health insurance, in order to be able to move forward and rebuild.
“And yet the only thing you want to do is just, you know, sit there in misery.”
More on California Wildfires
Related Topics:
Please use Chrome browser for a more accessible video player
2:26
Oscars 2025: Sky News team makes predictions
In Hollywood, few productions have had to be paused because less is being shot here these days, the fires adding to the existential crisis the city was already facing.
Wes Bailey’s company SirReel has been renting out film and TV production equipment in Los Angeles since the 1990s – but in recent years work in the city of dreams has dried up.
First COVID-19, then strikes and now, after a race for scale to commission content for streaming platforms, the industry is facing a production contraction and Bailey says it needs help.
“The fires were, I think, the catalyst to really get people to say ‘we’ve got an emergency here’,” he says.
“You go into the UK and you get a 40% return on your money.
“I think the way that California delivers that incentive has been sloppy, it’s been inconsistent.”
For glossy reality show Selling Sunset, set around high-end real estate in LA, production has now resumed after pausing when the fires broke out.
Image: Jason Oppenheim
One of the show’s stars, Jason Oppenheim, says he’s had “many, many” emotional calls from clients.
“I’m 30% therapist right now, 20% attorney, 20% contractor and 30% real estate agent,” he tells Sky News.
He says Los Angeles has issues that need resolving if it wants to continue to attract investment.
“We obviously have a crime problem, we have a homelessness problem, we’ve obviously taxed to the point where we discourage development, and we obviously have seen significant loss of wealthy people leaving the state.
“If you really want to have a healthy, functioning society that’s egalitarian and creates opportunity for everyone, you’re going to need a lot of wealthy people in that city paying taxes, so you cannot force them away and that’s just a fact.”
Please use Chrome browser for a more accessible video player
8:18
The Oscars A-Z guide
Yet despite the frustration, he’s optimistic for the future of the Palisades – another area devastated by the fires.
“I would bet anything that the Palisades will be one of the most desirable areas on the planet to live in five years,” he says.
“The houses will be stunning, fireproof, beautiful architecture.”
But that seems a long way off now, and in the meantime for those left with nothing the little they can salvage becomes special.
Please use Chrome browser for a more accessible video player
4:33
Ultimate guide to film awards season
For Adam Jette that’s even an iron saucepan.
“To be able to pull anything out of this wreckage and have it, it’s so meaningful,” he says.
“It didn’t take our pets and it didn’t take our family, it just took stuff, but even just some of that surviving it really, it means something.”
Buried in the ashes following the wildfires is a lesson in what matters to those who keep this industry going – and it’s not red carpets or golden statuettes.
Tonight’s Brit Awards are shaping up to be a big night for female British artists, including Charli XCX and Dua Lipa.
The ceremony, which is taking place at London’s O2 Arena, will see artists who are currently dominating the charts come together to celebrate the best in popular music.
Leading nominations with five nods is Charli XCX, whose sixth album Brat was a viral hit last year.
Dua Lipa closely follows with four nominations – along with 2024 rising star winners The Last Dinner Party, and 2023 Mercury Prize winners Ezra Collective.
It will be his first time at the helm in four years, but fifth in total, after taking on the role for four consecutive years from 2018 to 2021.
Image: Host Jack Whitehall. Pic: John Marshall/JMEnternational
There are 16 categories for awards this year, including the big one – album of the year.
In the running for this is Charli XCX – BRAT, The Cure – Songs Of A Lost World, Dua Lipa – Radical Optimism, Ezra Collective – Dance, No One’s Watching and The Last Dinner Party – Prelude to Ecstasy.
Other awards up for grabs include: Artist of the year, group of the year, best new artist, song of the year, international artist of the year, international group of the year, international song of the year, alternative rock act, hip-hop/grime/rap act, dance act, pop act and R&B act.
Last year’s ceremony saw singer-songwriter Raye dominating, with a record number of six wins including a clean sweep of the big three; best artist, best song and best album.
This year, the trophy that winners will pick up on the night has been designed by artist Gabriel Moses.
Image: This year’s Brit Award trophy designed by Gabriel Moses. Pic: Brit Awards
Who is nominated?
Before the awards have even begun, Charli XCX has been announced as the winner of this year’s songwriter of the year award.
Also recognised is her longtime collaborator AG Cook, winning Brits producer of the year, reflecting the combined impact he and Charli XCX have had on music over the last 12 months.
The singer – whose real name is Charlotte Aitchison – could still pick up another five awards tonight including: pop act, dance act, song of the year, artist of the year and album of the year.
Behind Charli XCX, this year also sees The Beatles pick up a nomination for the song Now And Then.
Please use Chrome browser for a more accessible video player
1:01
The Brits go brat: 2025 nominations revealed
The Cure are also back with three nominations – following the release of their 14th album, Songs Of A Lost World, in 2024.
International artists such as Beyonce, Billie Eilish, Taylor Swift, Benson Boone, Chappell Roan and Kendrick Lamar have also all got nods, as well as homegrown talent such as Central Cee, Fred again.., Sam Fender and former Little Mix star JADE.
Image: Dua Lipa is nominated for four awards. Pic: Oscar Douglas
Sabrina Carpenter will become the first international artist to receive the global success award after breaking records in the UK charts.
The pop star held the top spot on the Official UK Charts for a combined 21 weeks in 2024, the first artist to do so in 71 years.
Image: Sabrina Carpenter at the Grammys. Pic: AP/Chris Pizzello
Her mega-hits Taste, Please Please Please and Espresso held the top three spots simultaneously, making her the first female artist to do so.
Already named as this year’s rising star is British singer-songwriter Myles Smith, whose single Stargazing became one of the UK’s biggest hits of 2024.
You can read the full list of nominations ahead of tonight, right here.
Image: The Cure. Pic: Andy Vella
Who is performing?
Taking to the stage at this year’s ceremony is a mix of UK and US artists including Sam Fender, JADE, Teddy Swims and Myles Smith.
Off the back of winning the award for global success, Sabrina Carpenter, will also treat audiences to a performance.
It comes after Carpenter’s slapstick comedy mashup performance at the Grammy’s was dubbed “iconic” by fans.
Image: The Last Dinner Party will take to the stage to perform. Pic: Brit Awards
It is the first year American artists Shaboozey, known for A Bar Song (Tipsy) and Teddy Swims, known for Lose Control, will also perform at the awards.
“I’m beyond grateful and humbled to not only be nominated for a Brit Award but to take the stage,” Shaboozey said.
“This past year has been huge for me with my records getting love from all over the world and now I can celebrate with my friends and fans in London.”
Image: Myles Smith is this year’s Brit Awards rising star winner. Pic: JM Enternational
Meanwhile, JADE, whose real name is Jade Thirlwall, said she “manifested” performing at the Brits every day since the release of her debut solo single Angel Of My Dreams last year.
The singer already has three Brit Awards to her name, winning best British single for Shout Out To My Ex, video of the year for Woman Like Me and best British group with Little Mix, but is nominated this year as a solo artist in the song of the year and pop act categories.
Image: Former Little Mix star JADE. Pic: Flore Barbay
Also performing on the night are Lola Young – who is nominated for best pop act – and The Last Dinner Party, who won the Brits rising star award last year.
How to watch
Live coverage of the Brits will start on ITV and ITVX from 8.15pm tonight.
You can also follow along with all the latest from the red carpet and ceremony on Sky News and our dedicated live blog.
For those outside the UK, the show is available to watch internationally on the Brits YouTube channel.
A US judge tossed the SEC’s case against Hex founder Richard Heart, stating it couldn’t decide whether he defrauded investors of $12.1 million because the US lacked jurisdiction.