A 3.4% GDP print hides a ‘haunted’ housing market and a September stall in the economy
Source: Fortune ·
AI equipment spending rose 37.4% in the third quarter while housing investment fell 3.3%, and real consumer spending stalled in September.
From the source
The U.S. economy grew at a 3.4% annualized pace in the third quarter, the Bureau of Economic Analysis said Thursday, up from 2.2% in the second quarter and above the 3.2% median forecast. Consumer spending rose 3.8%, and Goldman Sachs economists called the makeup of the quarter “strong.” Look underneath, though, and much of the growth came from a few places, and some of it had slowed by the end of the quarter. Spending on information-processing equipment, the computers and peripherals going into the AI buildout, jumped 37.4%, and industrial equipment surged 24.7%, according to BEA data broken out by Goldman. But housing investment fell 3.3%. Inventories, which companies build up and then sell down, added 1.6 percentage points to the headline GDP gain, or nearly half of it. And in September, the last month of the quarter, real consumer spending was flat, according to the personal consumption and expenditures report. Goldman expects consumer spending to slow from here as the boost from…