The United States' Real Gross Domestic Product (GDP) expanded at an annual rate of 33.1% in the third quarter, the US Bureau of Economic Analysis' advance estimate showed on Thursday. This reading came in better than the market expectation of +31% and followed the 31.4% contraction recorded in the second quarter.
With the initial market reaction, the US Dollar Index edged slightly lower from the 13-day high it set at 93.80. As of writing, the index was up 0.31% on the day at 93.72. Meanwhile, the EUR/USD pair recovered modestly in the last minutes and is currently losing 0.3% at 1.1709.
US GDP Quick Analysis: No V-shaped recovery despite 33.1% leap, covid looms over markets.
The best quarter in history – following the worst one. Gross Domestic Product jumped by an annualized rate of 33.1%, above expectations. That included a surge of 40.7% in personal consumption, a core component of the economy. Business spending is up over 23% after crashing 27%.
US Dollar Index off highs around 93.80 post-data, looks to ECB.
The US Dollar Index (DXY), which gauges the greenback vs. a basket of its main rivals, sticks to the positive performance albeit off daily highs near 93.80.
Key takeaways from the press release
"The increase in real GDP reflected increases in personal consumption expenditures (PCE), private inventory investment, exports, nonresidential fixed investment, and residential fixed investment that were partly offset by decreases in federal government spending and state and local government spending."
"Imports, which are a subtraction in the calculation of GDP, increased."
"Current‑dollar GDP increased 38.0%, or $1.64 trillion, in the third quarter to a level of $21.16 trillion. In the second quarter, GDP decreased 32.8%, or $2.04 trillion."
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