US GDP growth rose in 3Q16
US GDP recorded the biggest gain in 3Q16 since 2014—it rose 2.9% in 3Q16. It’s better than the market’s expectation of 2.5% growth. It’s also stronger than the 2Q16 reading of 1.4%.
Exports support the growth
Rising exports in 3Q16 helped the US GDP move higher despite moderate consumer spending data. The exports rose 10% in 3Q16—the biggest improvement since 4Q13. The exceptional improvement is supported by the rise in soybean exports in 3Q16, which also helped shrink the trade deficit. In 2Q16, the trade deficit contributed 0.18 percentage points to US GDP growth. Its contribution rose to 0.83 percentage points in 3Q16.
Consumer spending slowed down in 3Q16
Consumer spending accounts for almost 66% of US economic activity. It slowed down in the third quarter. According to the data released by the U.S. Department of Commerce at 8:30 AM EST today, consumer spending grew 2.1%—less than the market’s expectation of 2.6% growth. In the second quarter, consumer spending grew 4.3%. The US dollar gained strength after the release of better-than-expected US GDP data. West Texas Intermediate crude oil fell 1.1% and traded at $49.14 per barrel at 9:20 AM EST. It was trading at $49.36 per barrel before the release of US GDP data.
Major copper and gold miners opened higher on October 28. At 9:40 AM EST, Freeport-McMoRan (FCX), Rio Tinto (RIO), Barrick Gold (ABX), and Newmont Mining (NEM) were trading with a rise of ~2.9%, ~1.1%, ~1%, and ~0.72%, respectively. The SPDR S&P Metals & Mining ETF (XME) and the PowerShares DB Base Metals (DBB) rose ~0.56% and ~0.64%.