Economic Data: October PCE, Q3 GDP revision, jobless claims

Investors are gearing up for a significant day of economic data on Wednesday, November 27, 2024. Hosts Josh Lipton and Julie Hyman highlight several key reports that are set to be released.

Key Economic Reports to Watch: PCE Data, GDP Revision, Jobless Claims

The focus will be on the Personal Consumption Expenditures (PCE) data, which is the Federal Reserve's preferred inflation gauge. Wall Street anticipates a 0.3% increase in core inflation for October. Additionally, the first revision of third-quarter GDP (gross domestic product) is expected, with analysts projecting a reading of 2.8%.

Moreover, initial jobless claims data will provide insights into the labor market's health. On the housing front, investors will also receive the latest figures for pending home sales in October.

Forecasts for October PCE Report Show Uptick in Inflation

Forecasts for the October Personal Consumption Expenditures (PCE) Price Index indicate that inflation remained stable last month; however, analysts assert that the overall disinflation trend is still intact.

Price pressures have declined significantly from their peak two years ago, but the pace of improvement has slowed in recent months. The PCE Index, which the Federal Reserve prefers as a measure of price pressures, aims for an inflation target of approximately 2% over time for a healthy economy.

Economists expect the overall PCE Price Index to increase by 0.2% month-over-month and 2.3% year-over-year, based on FactSet’s consensus estimates. Core PCE inflation, which excludes the more volatile food and energy prices, is anticipated to rise by 0.29% monthly and 2.8% annually. While both measures are expected to increase compared to September, analysts maintain that price pressures are still on a path of improvement. According to Russell Price, chief economist at Ameriprise Financial, a higher reading in October “doesn’t derail the longer-term trend.”

Q3 GDP Revision

The U.S. economy grew slower than expected during the third quarter of this year. Real gross domestic product increased at an annual rate of 2.8% in Q3 2024, according to the advance estimate. The latest estimate is below the forecasted 3.0% growth and is below the Q2 2024 GDP final estimate of 3.0%.i

Real gross domestic product (GDP) reflects the rate of economic growth by measuring the inflation-adjusted value of all goods and services produced within an economy. It is regarded as the most comprehensive indicator of economic activity and a key gauge of economic health. The Bureau of Economic Analysis (BEA) releases real GDP data monthly, providing three versions—advance, second, and final—each incorporating progressively more complete data. Economists utilize GDP to assess whether an economy is expanding or entering a recession.

Jobless claims

Weekly jobless claims rose less than expected last week, reaching a seven-month low, as the impact of labor strikes and severe weather has made weekly data noisy over the last few months.

New data from the Department of Labor showed 213,000 initial jobless claims were filed in the week ending Nov. 16, down from 219,000 the week prior and below the 220,000 economists had expected.

Weekly unemployment claims have been steadily declining over the past few weeks after reaching their highest level in over a year in October.

In contrast, the number of continuing applications for unemployment benefits rose to 1.9 million, an increase of 36,000 from the previous week, marking the highest level since November 2021.

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