- U.S. GDP rose at a seasonally-adjusted annual rate of 2.6% in the third quarter
- The S&P CoreLogic Case-Shiller 20-City Composite Home Price Index fell 1.1% in August
- The Conference Board’s Consumer Confidence Index fell in October to 102.5
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Exports Drive Q3 GDP Increase: The Bureau of Economic Analysis reported last week that U.S. gross domestic product (GDP), a measure of all goods and services produced, rose at a seasonally-adjusted annual rate of 2.6% in the calendar quarter ended September 30, 2022. This was the first time in three quarters that GDP increased. Trade contributed in large part to the growth, led by exports of energy products and capital goods. Consumer spending also contributed positively, though for the third straight quarter spending on goods declined at the expense of rising spending on services (e.g., health care and food services). The largest detractor was private sector investment, particularly that directed to housing and inventories.
Home Prices Fall for Second Straight Month: U.S. home prices continued retreating in August, as the S&P CoreLogic Case-Shiller 20-City Composite Home Price Index, which measures average home prices in major U.S. metropolitan areas, fell 1.1% from the prior month. This was the second straight month that prices fell, and marked the largest month-on-month decline since 2011. The annual rate of price gains also continued to decelerate, as the index was up 13.1% in August from the prior year, down from a +15.6% annual rate in July. The strongest annual price growth was recorded in the Southeast (+24.5%) and South (+23.6%), though all 20 cities reported a slower rate of annual growth in August versus July.
Consumers' Outlook Remains Subdued: A pair of surveys released last week revealed a continued downcast mood among consumers. The Conference Board's Consumer Confidence Index fell in October to 102.5 from 107.8 in September, driven by increasing inflation expectations. While the October reading was off only slightly from the index's 10-year average of 104.9, it was down from 128.9 as recently as June of 2021. Separately, the Index of Consumer Sentiment published by the University of Michigan rose marginally in October to 59.9 from 58.6 in September, but remained well below its recent cycle high of 88.3 in April of 2021 and its 10-year average of 86.3.