Reflecting the past 3Q20 period, the GDP growth, which does not contain much new information for the current period, was confirmed at the level of 33.1% as in the previous reading. Thus, in the economy that shrank 31.4% in “annualized” terms in the 2Q20 period, re-growth was achieved with reopening and increased business activities. Upward revisions in non-residential fixed investment, residential investment and exports were offset by downward revisions to state and local government spending, private inventory investment and personal consumption expenditure (PCE).
When we look at the details of personal consumption expenditures, which is also an important source in terms of PCE inflation data; In addition to health services, food and accommodation have a positive contribution to services, and motor vehicles and their parts as well as clothing and shoes in goods. It shows that the effect of private consumption in retail trade is increasing. However, the issue of car ownership is also related to the new perceptions and norms brought about by the pandemic, because people now want to use less public transportation. The increase in exports is mainly in line with the trend in general goods. There is also the contribution of capital goods as well as automotive and its parts. The increase in housing investments is also due to the demand for more detached houses due to the decreasing mortgage rates and the pandemic.
Jobless claims were announced at 778K, the highest level in 5 weeks, above the market expectation of 742K. The cut of federal spending and aid and the Fed's transfer of funds not used within the framework of its financing programs to the Treasury will not bring back the employment, and will cause the effect of real income decline to be felt more. The fiscal package postponement is not a good situation for the employment market.
Durable goods orders increased by 1.3% in October, higher than expected 0.9%, while the increase in core orders was 1.3%, higher than expected 0.5%. There was an increase of 0.2% excluding defense and 0.7% excluding aircrafts.
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Hibya Haber Ajansı