The S&P 500 fluctuated at the open following steep losses over the last three days. A separate report showed applications for U.S. state unemployment benefits fell more than forecast last week. The yield on 10-year Treasuries was little changed and the dollar rose.
The third-quarter rise spanned most categories. Residential investment jumped 59.3%, the fastest since 1983, reflecting a recent boom in the housing market, supported by record-low mortgage rates.
Business investment rose 20.3%, though that was driven by equipment, as structures and intellectual property both showed declines.
The rebuilding of inventories added 6.6 percentage points to the quarterly growth pace, and will likely continue to be a prop in the current quarter as companies add to stockpiles that were whittled down during lockdowns.
The pandemic’s impact on Americans’ spending patterns was also clear from the report. Consumer spending typically makes up about two-thirds of GDP.
Goods spending was above pre-pandemic levels, driven by increases in motor vehicles and apparel. Services gained on rebounds in health care and food services and accommodations, but overall outlays remained shy of levels seen at the end of last year.
Meanwhile, net exports subtracted 3.1 percentage points from growth as the trade deficit widened. Government spending was a 0.7 point drag, due to nondefense and state and local outlays.
The third-quarter figures are also in line with generally solid corporate reports during the latest corporate earnings season. So far, about 85% of companies in the S&P 500 have beaten analysts’ earnings estimates, including General Electric Co. and Microsoft Corp.
This is the first estimate of three for the third-quarter figures, and the figure will likely be revised over the next two months as the Bureau of Economic Analysis receives further data.
This article was provided by Bloomberg News.