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.
- 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.