Welcome to Extreme Investor Network! Today, we are diving into the latest economic data regarding the US economy. According to recent data from the Commerce Department, the US economy grew by 2.8% during the third quarter, slightly below expectations of a 3.1% increase. This growth rate represents a slowdown from the 3% growth seen in the previous quarter.
One key highlight from the data is the 3.7% increase in personal consumption expenditures (PCE) during the last quarter, marking the strongest performance since the first quarter of 2023. However, it is important to note that government spending plays a significant role in driving growth, with a notable 9.7% increase in federal government spending, 14.9% of which was allocated to defense.
The Personal consumption expenditures price index saw a 1.5% increase, which is being viewed as positive news for the Federal Reserve. This uptick in prices has led to speculation about a potential rate cut during the next Federal Open Market Committee meeting, as the core PCE remained steady at 2.2%.
Despite the rise in consumer spending, there are concerns about the accuracy of the data provided by the government. While consumer spending has increased, personal savings have actually decreased from 5.2% to 4.8%, indicating that Americans are spending more but saving less, potentially leading to increased debt levels.
On a positive note, the US continues to remain a safe haven for international capital, as evidenced by a 5.87% increase in capital flows to the US on a monthly basis, as reported by the Global Market Watch. Our proprietary forecasting tool, Socrates, predicts a continued increase in capital flows to the US in the coming months.
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