Consumer spending drives unexpected US growth spurt

<p>Kia ora,</p><p>Welcome to Friday’s Economy Watch where we follow the economic events and trends that affect Aotearoa/New Zealand.</p><p>I'm David Chaston and this is the international edition from Interest.co.nz.</p><p>And today we lead with news that is impressive out of North America.</p><p>First up today, the Americans have delivered a stellar Q3-2023 GDP expansion, far higher than the optimistic forecasts, and far higher than the very good Q2-2023 expansion of +2.1%. In Q3, the giant American economy grew +4.9% according to their <a href="https://www.bea.gov/news/2023/gross-domestic-product-third-quarter-2023-advance-estimate" target="_blank"><strong>advance estimate</strong></a>. Better, this was built on stronger than expected consumer spending.</p><p>Their <a href="https://www.bea.gov/news/2023/gross-domestic-product-third-quarter-2023-advance-estimate" target="_blank"><strong>PCE price index</strong></a>, an inflation measure the US Fed takes note of, rose +2.9% from a year ago, with the 'core' measure up +2.4% and less than expected.</p><p>That was just the start of their 'good economic news'. US <a href="https://www.census.gov/manufacturing/m3/adv/pdf/durgd.pdf" target="_blank"><strong>durable goods orders rose</strong></a> a startling +6.0% in September from a year ago, up at a +4.7% rate from the prior month. No one saw this surge coming either. Capital goods orders were hit out of the park, up +16% from the same month a year ago.</p><p>New <a href="https://www.dol.gov/sites/dolgov/files/OPA/newsreleases/ui-claims/20232291.pdf" target="_blank"><strong>initial jobless claims</strong></a> for last week came in at 192,000, and while still very low, it was marginally higher than a week ago. But there are now only 1.58 mln people on these benefits, also unusually low.</p><p>US <a href="https://www.census.gov/econ/indicators/advance_report.pdf" target="_blank"><strong>exports rose</strong></a> +2.9% in September from August, but that still leaves them -2.2% lower than the same month a year ago. Their mer