GDP, Inflation, A Victory Lap, & More

Week in Review: Oct. 23-27

The economy grew at a blistering 4.9% annual rate in the third quarter. As one of the few who thought the U.S. economy would dodge a recession in 2023, I (Zack) am tempted to take a victory lap. And yes, I was right. But I wasn’t that right.

I thought GDP would expand between 0.5% and 1% in 2023, with growth slowing during the second half of the year. Not only did growth pick up in recent months, but GDP expanded at a faster than 3% annual rate through the first three quarters of the year.

Which is to say, I really underestimated how strong the economy would be. Most people who write about this stuff just underestimated it even more.

Anyway. This week brought us updates on GDP, new and pending home sales, durable goods orders, income, spending, savings, inflation, and more.

Monday

Gas Prices

Gas prices fell for the fifth straight week. At $3.66/gallon, prices are at their lowest point since the first week of July.

Diesel Prices

Diesel prices increased last week but, at $4.55/gallon, are roughly $0.80/gallon cheaper than during the same week last year.  

TSA Checkpoint Travel Numbers

The number of people passing through TSA security during the week ending 10/25/23 was nearly 9% higher than in the same week of 2019. The travel industry is still scorching hot, but we’ll see if that lasts into winter.

Tuesday

S&P Global Flash US Composite PMI

The U.S. private sector expanded at a faster pace in October than it did in September, according to this survey of business leaders in the manufacturing and services sectors. Manufacturing output expanded at the fastest pace in six months. Activity in the services sector grew at the fastest rate in three months.

Maybe the most important takeaway here is that “inflationary pressures softened. Cost burdens rose at the slowest pace for three years, with firms moderating hikes in selling prices at the same time. The rate of charge inflation eased to the weakest since June 2020 and was slower than the long-run series average.”

Wednesday

New Home Sales