US Prelim GDP upward revision but a slight miss
The second reading of third-quarter US growth has been revised higher. Q3 Prelim GDP came in at +2.1% which was higher than the +2.0% at the Advance GDP reading. However, this was slightly less than the +2.2% upward revision forecast by the market for the quarter on quarter growth.
Elsewhere on the calendar, there was a mix of news, with weekly jobless claims much lower than expected, whilst durable goods orders were negative on the headline number.
- Weekly Jobless Claims have fallen far more than expected to 199,000 (260,000 expected) which is a considerable reduction from last week’s 270,000. This is an important number as it sets up well for next week’s Nonfarm Payrolls data. This is the lowest number of jobless claims since the pandemic began.
- US Durable Goods Orders fell by -0.5% in October (+0.2% expected). This was after having fallen by -0.3% in September. However, the headline is notoriously volatile compared to the forecast and markets tend to pay more attention to the core durables (ex-transport) which were in line with expectations at +0.5% (+0.5% in September).
What does this mean?
Given the backward-looking nature of GDP, this will not change a great deal for markets. The jobless claims numbers are probably more notable given the size of the positive surprise and what this might mean for payrolls next week.
Initial Market Reaction
Markets have been a little uncertain, with EUR/USD falling initially and then back higher. We favor a continuation of USD strength (given the weekly jobs