U.S. GDP growth likely to move up again by year-end

In the United State, job growth slowed in August and September and wage inflation remains muted despite an unemployment rate of 5.1% - close to the assumed NAIRU. Uncertainty over the amount of slack in the labour market thus remains. Domestic data has been solid although growth  rates have cooled off a bit.

On the other hand, the manufacturing sector of the economy is slowing on a combined negative impetus from an inventory overhang built up in the first half of the year, a strong USD and weaker global demand. 

GDP growth of the United State is thus likely to have slowed in Q3 but it is expected to move higher again by year-end, argues Danske Bank. Risks to the outlook have risen, as the slowdown in China and emerging market in general could hurt U.S. growth through several channels: a direct shock to exports, a negative impetus from a stronger USD (so far small) and a sentiment effect on investments via increased uncertainty over global growth (unknown so far). 

PCE inflation remains low but a gradual uptrend is expected next year driven by rising wage growth, upward pressure from rising unit labour costs and the higher oil price, added Danske Bank.