The U.S. economy showed strong growth in the third quarter of 2023, according to official data released on Thursday. The main drivers of the expansion were consumer spending and a robust job market, which reduced the chances of a recession in 2024.

The data from the Commerce Department showed that GDP grew at an annual rate of 4.9% in the July-September period, up from 2.1% in the previous quarter, and beating the analysts’ expectations of 4.5%, the BBC reports.

The increase reflects “accelerations in consumer spending, private inventory investment, and federal government spending,” among other factors, according to the US Bureau of Economic Analysis.

The Personal Consumption Expenditures Price Index, the PCE deflator that is often used by the Federal Reserve as a benchmark for near-term inflation risks, at at 3.5% for the quarter, while the core PCE deflator, which excludes food and energy prices, slowed down to 2.4%, the lowest level since the last quarter of 2019 and potentially easing worries about future interest rate hikes.

On top of this, data from the Commerce Department showed that consumer spending contributed 2.7 percentage points to the 4.9% growth, while an unexpected increase in corporate inventories – a sign of strong demand in the near term – added another 1.3 percentage points.

The bond markets also got some positive news from the Labor Department, which reported that the number of Americans applying for new unemployment benefits rose by 10,000 to 210,000 in the week ending on October 21, as TheStreet reports.

The economic data has seen US Treasury yields fall, with the 10-year yield dropping to 4.89% and the 2-year yield dropping to 5.04%. The CME Group’s FedWatch tool, which tracks investors’ expectations of near-term interest rate changes, is showing a 98.2% probability that the Fed will keep rates unchanged at between 5.25% and 5.5% at its policy meeting next week in Washington.

Notably, as CryptoGlobe reported, ahead of the data’s release economists from Bloomberg shed light on the potential global economic repercussions of the ongoing conflict between Israel and Hamas and its potential to trigger a global recession, especially if it escalates.

The host of CNBC’s “Mad Money” and well-known market analyst Jim Cramer has recently suggested that investors may want to hold out on buying assets until interest rates rise again, believing an ensuing sell-off will lower prices.

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