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Shaking Off The Third-Quarter Slowdown

21 October 2021 - 3 min read

While U.S. consumer spending in Q3 is set to slow notably from the strong Q2 pace, the upward surprise in September retail sales suggests it has room for a pick-up in Q4.


Arrows indicate consensus forecast compared to the previous period. Local dates of release.


  • Third-quarter GDP is expected to show a notable slowdown from the strong Q2 pace amid the Delta wave and supply constraints. However, tailwinds, such as a healthy consumer, suggest growth can improve in the year’s final quarter.
  • We will watch the Q3 Employment Cost Index—among our preferred measures of wage growth—particularly given longer-lasting labor supply constraints.


  • We expect Q3 GDP to increase to 3.2% Q/Q, up from 2.0% in Q2, as the recovery accelerated with the fast pace of vaccinations.
  • The ECB is unlikely to announce any policy moves at its October 28 meeting.
  • The consumer confidence indicator and unemployment rate should indicate whether demand will remain strong.

Asia Pacific

  • China industrial profits could continue to be weighed down by elevated PPI.
  • The contraction in Japan industrial production is expected to moderate. With supply-chain constraints already materializing in real export data, risks could be to the downside for auto production, given the semiconductor shortage. 

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