Gross domestic product increased at a 1.5 percent annual rate after expanding at a 3.9 percent clip in the second quarter, the Commerce Department said on Thursday.
The inventory drag, however, is likely to be temporary and economists expect growth to pick up in the fourth quarter given strong domestic fundamentals.
The Fed on Wednesday described the economy as expanding at a “moderate” pace and put a December rate hike on the table with a direct reference to its next policy meeting. The U.S. central bank has kept benchmark overnight interest rates near zero since December 2008.
I want nothing more than for Americans to have a happy Christmas filled with lots of shopping and outrageous gifts and record-setting Black Friday and all the rest.
And if last quarter’s weak growth really was due to working off excess inventory, we really might have a strong 4th quarter.
But wages remain stagnant. Labor force participation is still shrinking.
So where will the demand come from? Another round of credit card binging? More HELOC spending?
Things are starting to feel all bubbly again.