In an advanced estimate, the US Bureau of Economic Analysis reported that the US economy expanded in the third quarter of 2024. The US economy continues to show its leadership and deliver relatively healthy growth, which has helped the global economy avoid a recession. And US consumers, who have benefited from pent-up savings and a relatively robust labour market, continue to help drive that growth.

• The advanced estimate showed the US economy expanded at an annualized pace of 2.8% in the third quarter. This fell short of the 2.9% growth economists had expected, based on a survey from Bloomberg. The US economy has expanded for 10 straight quarters.
• Robust personal spending exceeded expectations over the quarter, rising by 3.7%. US consumers continue to spend, helping prop up the economy. Consumers have brushed aside higher borrowing costs and elevated inflationary pressures. Instead, savings and a strong labour market have boosted consumer strength.
• Government spending grew over the quarter, while real estate investment contracted at a sharper pace compared to the previous quarter. Demand for real estate has been muted with potential purchasers appearing to wait until rates come down further before entering the market.
• While recent signs have shown a slowdown in the US labour market, it remains in a relatively strong position. ADP announced that private businesses in the US added 233,000 jobs in October, the highest since mid-2023.

Yesterday’s economic data releases tell the story of a relatively healthy US economy. However, there are still some pockets of weakness that are weighing on growth, notably the real estate market. Investors have had a lot to consider as they try to predict the next move by the US Federal Reserve Board, whose next interest-rate announcement is on November 7.

If you would like to discuss this economic and market update or have questions about your finances and investments, please feel free to contact me anytime.