"We are going to need a couple of months because there is going to be so much noise in the data"
- Scott Anderson, chief economist of Bank of the West
Clouds are gathering above the world's largest economy, as Thursday's report is likely to show the U.S. economy significantly slowed in the third quarter, while other fundamental data do not offer much clarity, as they are mostly marked by asterisk. Almost three-week long disruption in U.S. government's work put hundreds of thousands Americans out of work, making consumers and businesses more cautious, forcing companies to hunker down until the standoff ended. Gross domestic output probably expanded at a 2% annualized rate after a 2.5% growth recorded from April through June, a report from the Commerce Department would show on November 7. Furthermore, payrolls are likely to rise just 125,000 in October, after a 148,000 increase in September. A slowdown in economic output, restrained business and consumer purchases has prompted analysts to trim Q4 growth estimates as well. Despite lower forecasts, Thursday's report may not provide much insight into how the 16-day shutdown affected the Q4 growth.
Following gloomy news and forecasts, a report from the US Department of Commerce send an optimistic sign, showing factory orders rose at the fastest in 2 1/2 years, suggesting a shutdown had limited effect on manufacturers. Demand for US-made goods soared 1.7% in September, recovering from a 0.1% drop a month earlier.
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