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After a weak first half of the year, the third quarter GDP came in strong, beating expectations with 2.9% annualized growth. Personal consumption, which rose 2.1% annualized, was the biggest contributor to the overall growth, adding 1.5 percentage points to the total. Exports were also a highlight, growing 10.0%, largely thanks to exports of food, especially soybeans. This added 0.8 percentage points to the quarter’s total growth and easily outweighed the 2.3% rise in imports. The third quarter started slowly but ended on a high note, suggesting there is momentum to be carried into the fourth quarter.
New home sales came up 3.1% in September to a 593,000 annualized rate. Despite sharp downward revisions to the July and August home sales numbers, the year is still looking strong, with Y/Y new home sales up 30% (compared with an almost flat resale market). Prices came up 6.7% in the month, bringing it to a 1.9% gain Y/Y. The median new home price is now $315,5000. Breaking it down by region, the South, Midwest, and Northeast all posted solid monthly gains, while the West saw a 4.7% decline. The two largest regions, the South and West, are both strongly up Y/Y.
In contrast to the strong GDP and new home sales reports, September durable goods orders were flat. Orders dropped 0.1% M/M, which was lower than expected, but does not look quite so bad in light of an upward revision to the August rate, which is now 0.3%. A very large monthly decline in defense aircraft is a special factor in this report, offsetting a rise in civilian aircraft and vehicle orders. Excluding transportation, durable goods orders were up 0.2% M/M.
Upcoming Economic Reports:
Mon October 31 — Personal Income and Outlays
Fri November 4 — Employment Situation
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