Current outlook including comments on consumer spending, business investment, the recent hurricanes and continued recovery.
- The upside surprise of headline GDP at 3.0% gives the impression the hurricanes had little effect on GDP
- GDP would likely have been closer to 3.7% without the hurricanes and final sales of domestic goods shows a decline in the recent trend for consumption by consumers and businesses
- Services consumption slowed to 1.5%, likely due in part to the hurricanes which curtailed eating out and recreation in the third quarter
- Higher inflation measures support the Fed’s belief that the economy can generate inflation levels consistent with a normal recovery
- The preliminary Q3 data support a Fed rate hike in December and a steeper yield curve going into 2018
For more, download the latest U.S. update from KPMG’s Chief Economist Constance Hunter.