GDP beats at 3.4%, but September PCE rose to 3.6% — December hike stays live
Thursday's (10/29) BEA advance estimate: Q3 GDP grew 3.4% annualized, beating ~3.1% consensus and up from 2.2% in Q2, on investment (much of it AI/data-center), consumer and government spending. The split screen: September PCE — the Fed's preferred gauge — rose 0.5% on the month and 3.6% year over year (from 3.4% in August); core PCE 3.1% y/y. Quarterly PCE inside the GDP report was cooler (2.1% annualized), so both camps have a number. Coming a day after the Fed held at 3.75–4.00% with two dissents for a hike, market odds for a December hike sat around 80%. Real disposable income fell 0.3% in September and the saving rate hit 3.8%, the lowest since Oct. 2022 — the soft spot under the strong headline. Sources: ABC News · BEA data via StockVolt.