The economy may be in better shape than you think… right now

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The housing market He loses his strength quickly. interest rates continue to rise. The Stock market still fickle. And the inflation It’s still a huge problem for people trying to pay their bills.

Given all of that, one would think that the realistic economic report card for the third quarter – GDP, or GDP – due on Thursday would be bleak.

But that’s the thing.

Economists are actually forecasting decent, if not astounding, growth. Economists polled by Reuters had expected gross domestic product to grow at an annualized pace of 2.1% in the third quarter. (This will be the first estimate of third-quarter GDP, and there will be several revisions in the coming weeks.)

There is a more optimistic outlook from the Federal Reserve in Atlanta, which is widely followed and well respected GDP now The model tracks all the latest economic data and comes up with a forecast for GDP. The latest GDP reading now calls for 2.9% annual growth.

Why so rosy despite all the bleak news? First, a large part of GDP is made up of consumer spending – and while we’re all complaining about inflation, so far, high prices haven’t stopped consumers from profligate. According to figures released by the government, retail sales rose 8.2% in September compared to last year.

It also helps to keep the job market in good shape. American companies are adding hundreds of thousands of jobs a month, the unemployment rate is near a half-century low of 3.5%, and wages are increasing (albeit not as fast as prices).

If GDP ends up rising by 2% to 3% – rather than contracting as it did in the first and second quarters – then we are unlikely to be in a recession. This will be good news for consumers, investors, and the Federal Reserve.

It also means that the Fed will likely continue to raise interest rates sharply to eventually stifle inflation once and for all. Yes, this increases the odds of eventually a recession down the road because interest rate hikes take time to affect most parts of the real economy, with mortgage and housing rates being the notable exception.

“The Federal Reserve Risks a Recession in the US With the Interest Rate She argues that inflation may boost growth nominally as consumers spend more…but that comes at a cost. It eats workers’ salaries.

In addition to a strong third-quarter report, some economists are concerned about the future impact on growth.

“Looming GDP has been hit by a stronger dollar and a stronger dollar,” Jefferies economists Anita Markowska and Thomas Simmons said in a report. They compared the current Fed tightening and its consequences when the Fed was aggressively raising interest rates to fight inflation in the early 1980s under then-Fed Chairman Paul Volcker.

These price increases helped cause the so-called double recession, as the economy suffered two downturns between 1980 and 1982.

Markowska and Simmons are also concerned that the Fed is so focused on inflation that it won’t act fast enough to cut interest rates again once the economy shows more signs of a prolonged downturn.

“We also expect the Fed to be slow to respond to the economic weakness, which is likely to prolong and exacerbate the next recession,” they said, adding that they do not believe the Fed will cut interest rates until early 2024…Despite the recession” could To start by the third quarter of 2023.

In other words, the long-awaited “soft landing” could turn out to be just a distant dream.

An economic slowdown is likely in 2023 due to the difficulty of achieving a soft landing in general. A soft landing with an inflation rate above 8 percent will be more difficult to achieve, Jose Torres, chief economist at Interactive Brokers, said in a report.

“This recession may require the Fed to keep its footing on the brakes for a longer period of time,” he added. “Fighting high inflation while at the same time maintaining positive economic growth is a difficult ordeal.”

Bottom line: So the good news is that the economy is not likely to be in a recession yet… and third-quarter GDP should support this view. The problem is that deflation is still likely to come sometime in 2023.

Earnings have helped support the stock market so far this month. But the technology sector is unlikely to satisfy one of the sectors that performs better.

Results from the social networking company Snapchat

(pop, explode)which issued a bleak lookNot encouraging. and CNN Business. Claire Duffy Refers to profits coming from the likes of Apple

(AAPL)Amazon

(AMZN)owner of Google Alphabet

(The Google)Microsoft

(MSFT) and dad facebook dead It might not be very promising either.

The slowdown in online advertising will hurt many of these companies, most notably Meta and Alphabet, which also own YouTube. A stronger dollar will also affect all of their international sales and profits.

There are still hopes that these tech giants will have a more rosy outlook for the fourth quarter. After all, technology usually shines during the holidays as consumers outgrow gadgets.

But with inflation cutting household budgets, it remains to be seen how many new iPhones, Pixels, Xboxes and Quest VRs will come in Amazon’s smiling boxes this December.

Monday: Flash PMI for UK and Eurozone; Hyundai profits, philips

(PHG) and find out

(DFS)

Tuesday: US consumer confidence gains from General Motors

(GM)General Electric

(GE)UBS

(UBS)coca cola

(KO)UBS

(UBS)HSBC

(HSBC)succulents

(succulents)Jet Blue

(JBLU)Microsoft Visa Alphabet

(Fifth)Texas Instruments

(txen)spotify

(spot)Chipotle

(kg) And Mattel

(mat)

Wednesday: US new home sales; Boeing profits

(BA)Bristol Myers

(BMY)Barclays

(pecs)Heineken

(HEINY)German Bank

(dB)General Dynamics

(GD)Kraft Heinz

(KHC)Southern Norfolk

(National Security Council)Hilton

(HLT)Harley Davidson

(Pig)stronghold

(F) and dead

Thursday: the gross domestic product of the United States; European Central Bank rate decision; industrial production in China; US weekly unemployment claims; American durable goods; Earnings from Comcast

(CMCSA)Samsung

(SSNLF)Unilever

(water)Credit Suisse

(CS)Anheuser-Busch InBev

(bud)Larva

(cat)merck

(MRK)Southwest

(LUV)McDonald’s

(MCD)Master Card, Credit Card

(Master’s)Amazon, Apple, Intel

(INTC)T-Mobile

(TMUS) And Capital One

(COF)

Friday: US personal income and spending; Inflation of personal consumption expenditures in the United States; Bank of Japan interest rate decision; GDP of France and Spain; ExxonMobil earnings

(XOM)Chevron

(CVX)Volkswagen

(VLKAF)Abby

(ABBV)Communications charter

(CHTR) And Colgate Palmolive

(CL)