- Jim Baird, chief investment officer for Plante Moran Financial Advisors
While concerns about the health of overseas economies are mounting, the US economy continues to surprise analysts and market participants by its ongoing strength, as it grew steadily again in the third quarter, supported by American consumers and businesses. GDP rose at annualized rate of 3.5% in the July-September period, exceeding economists' expectations for a 3.0% growth and following a robust 4.6% pace in the previous quarter. The data presented advance estimate, which is based on incomplete information and thus will be subject to future revision. The third-quarter expansion was driven largely by an increase in government consumption, which gained 4.6%, the most since second quarter of 2009, adding 0.83% to the headline number.
Meanwhile, a separate report showed that the number of Americans seeking unemployment benefits rose last week, while underlying trend remains consistent with a strengthening labour market. Initial jobless claims increased to a seasonally adjusted 287,000 for the week ended October 25, the Department of Labor said, marking the seventh consecutive week that the gauge has come out below 300,000. The four-week moving average of claims, which is considered to be a better gauge of labour market trends as it strips out week-to-week volatility, declined 250 to 281,000.
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