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What You Need to Know

What You Need to Know
The latest insights from Commerce Trust on the economy, policy moves and market performance 

The economy surged during the third quarter, fueled by consumer spending on goods and services. U.S. Gross Domestic Product (GDP) expanded a surprising 4.9% annual rate for the period, according to the U.S. Department of Commerce. This was the largest quarterly gain in GDP since 2014, apart from the pandemic-related recovery in 2020-2021. Also, consumer spending jumped 0.7% in September, as Americans spent more on travel, healthcare and housing services for the month. 

The cost of U.S. goods and services grew faster than expected in September as measured by the Personal Consumption Expenditures Prices (PCE) Index, the Federal Reserve’s preferred inflation gauge. Inflation rose 0.4%, matching the same pace of growth in August. Core PCE Index, which excludes the more price-sensitive energy and food categories, increased 0.3% in September, compared to 0.1% the prior month. 

U.S. companies added 336,000 new jobs in September, shattering Wall Street expectations. The hospitality services sector led the way, adding more than 100,000 jobs. The government sector followed with 73,000 additional jobs to its payrolls. The unemployment rate for September remained unchanged at 3.8%. The labor force participation rate, which measures the population of Americans either working or actively seeking work was 62.8% in September, also unchanged from August. 

“Main Street” Business. 
Small business optimism continues to slide, as inflation and labor quality remain major concerns for many U.S. small business owners, according to the National Federation of Independent Business (NFIB.) In its monthly Small Business Optimism Index, the NFIB reported a 90.8 score for September, marking the 21st consecutive month the reading was below index's 49-year average of 98. 

Sources: The Wall Street Journal, U.S. Census Bureau, Morningstar, Department of Commerce. 

The opinions and other information in the commentary are provided as of October 30, 2023. This summary is intended to provide general information only and may be of value to the reader and audience. 

Past performance is no guarantee of future results. This material is not a recommendation of any particular investment strategy, is not based on any particular financial situation or need and is not intended to replace the advice of a qualified tax advisor or investment professional. While Commerce may provide information or express opinions from time to time, such information or opinions are subject to change, are not offered as professional tax, insurance, or legal advice, and may not be relied on as such. 

Data contained herein from third-party providers is obtained from what are considered reliable sources. However, its accuracy, completeness or reliability cannot be guaranteed. 

Diversification does not guarantee a profit or protect against all risk. 
Commerce Trust is a division of Commerce Bank.