BEA: US Q3 GDP Up 4.4% on Higher Exports, Investments


   
Barani Krishnan
DTN Refined Fuels Market Reporter

   SECAUCUS, NJ (DTN) -- The U.S. economy expanded at a 4.4% annualized rate in 
the third quarter, according to data from the Bureau of Economic Analysis (BEA) 
released Thursday (1/22) that showed resilient consumer spending, investments 
and high exports. The figure also reflected a drop in imports, which are a 
subtraction in the calculation of the gross domestic product.

   The final figure was revised higher by 0.1 percentage points from the 
previous estimate on upward revisions to exports and investments.

   The surge in real GDP significantly outpaced most economist estimates, 
underscoring growth momentum despite a record-long federal government shutdown 
throughout October and the first half of November.

   A consensus of forecasts by Wall Street economists had put third-quarter GDP 
growth at 4.3% year-over-year.

   The Atlanta Fed's GDPNow model, another tracker of economic growth, 
meanwhile estimates an annualized growth of 5.4% for the fourth quarter.

   Policymakers at the Federal Reserve are balancing economic performance 
against a softening labor market and higher living costs brought on by varying 
tariffs of between 10% and 100% levied by the Trump administration on imports 
from most countries.

   The U.S. Consumer Price Index grew at an annualized rate of 2.7% in 
December, in line with Wall Street's forecasts, but still higher than the Fed's 
long-term 2% target. The central bank has signaled that there may be only one 
rate cut this year due to inflationary concerns, after three reductions of 25 
basis points each in 2025.

   Yields on the 10-year U.S. Treasury note, a proxy for hawkish monetary 
policy, rose for a third time in four days this week after the release of the 
third-quarter GDP numbers. Wall Street's S&P 500 rose by 1.2%, up for a second 
day in a row. The February delivery contract for WTI on NYMEX showed a 1.7% 
decrease.




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