Key Takeaways
- Delayed Q3 GDP, at 4.3%, Is the Strongest Print in 2 Years
- Delayed Durable Goods Orders Slid to -2.2% in October
- Pre-market Futures Are Selling on Lower Likelihood of a Rate Cut
Tuesday, December 23, 2025
We begin today’s pre-market trading session slightly in the red following a strong day of trading Monday, and following a slew of economic reports ahead of the bell they have begun to slide a bit deeper down. Ahead of these reports, the Dow and Nasdaq were both -15 points and the S&P 500 was -2. Currently, the Dow is -80 points, the Nasdaq -70 and the S&P 500 -12. The small-cap Russell 2000 is -6 points at this hour.
Q3 GDP Much Stronger Than Expected: +4.3%
Today’s delayed
Q3 Gross Domestic Product (GDP) came in at +4.3% this morning, well above the +3.2% analysts had been expecting. It’s also the strongest growth number in two years, and half a point higher than Q2’s +3.8%. Consumption led the way, +3.5%, well up from the +2.7% anticipated. The Price Index came in at +3.8%, more than 100 basis points (bps) higher than the expected +2.7% and the prior quarter’s +2.1%.
Core GDP in Q3 reached +2.9%, 30 bps ahead of expectations and the highest since Q1 notched +3.3%. These are all strong numbers for an economy that, due to the 6-plus-week federal government shutdown, was flying blind for a spell. Now we see that growth was even stronger than consensus had previously surmised.
Durable Goods Slide to Negative in October: -2.2%
Another delayed report this morning is the preliminary read on
Durable Goods Orders, which for October reached -2.2%, below the -1.1% consensus estimate. This is now the fourth negative print of 2025 so far, but nowhere near as severe as June’s -9.4%, which was the lowest of the post-Covid economy. But we also saw a positive revision to the previous month +20 bps to +0.7%.
Strip out volatile Transportation costs, and we swing back to positive: +0.2% in October. Still, it’s the weakest showing since April of this year, and follows a slightly upwardly revised +0.7% from September. Non-Defense, ex-aircraft (a proxy for “normal” enterprise spending) came in at a decent +0.5%, down from the upwardly revised +1.1% the prior month. Shipment more than doubled expectations to +0.7%, with a previous-month revision up to +1.2%
What These Numbers Mean for the Market
Obviously, a return to stronger growth and productivity is good for the economy overall. However, it also adds to the likelihood that the Fed will put a pin in rate cuts going into the new year — specifically, at January’s FOMC meeting, which already was showing just a +24% chance of a cut prior to this release. But it does explain why market participants would be riding indexes lower ahead of today’s opening bell.
Once regular trading is underway today, December Consumer Confidence numbers are expected to improve to 91.7 from 88.7 posted last month. Minutes ahead of the bell, we’ll see Industrial Production and Capacity Utilization numbers from November, which are expected to come in relatively muted. But who knows? Maybe we’ll see some upward surprises there, as well.
Questions or comments about this article and/or author? Click here>>
Image: Bigstock
Q3 GDP +4.3%: Consumer Carries Economic Heft
Key Takeaways
Tuesday, December 23, 2025
We begin today’s pre-market trading session slightly in the red following a strong day of trading Monday, and following a slew of economic reports ahead of the bell they have begun to slide a bit deeper down. Ahead of these reports, the Dow and Nasdaq were both -15 points and the S&P 500 was -2. Currently, the Dow is -80 points, the Nasdaq -70 and the S&P 500 -12. The small-cap Russell 2000 is -6 points at this hour.
Q3 GDP Much Stronger Than Expected: +4.3%
Today’s delayed Q3 Gross Domestic Product (GDP) came in at +4.3% this morning, well above the +3.2% analysts had been expecting. It’s also the strongest growth number in two years, and half a point higher than Q2’s +3.8%. Consumption led the way, +3.5%, well up from the +2.7% anticipated. The Price Index came in at +3.8%, more than 100 basis points (bps) higher than the expected +2.7% and the prior quarter’s +2.1%.
Core GDP in Q3 reached +2.9%, 30 bps ahead of expectations and the highest since Q1 notched +3.3%. These are all strong numbers for an economy that, due to the 6-plus-week federal government shutdown, was flying blind for a spell. Now we see that growth was even stronger than consensus had previously surmised.
Durable Goods Slide to Negative in October: -2.2%
Another delayed report this morning is the preliminary read on Durable Goods Orders, which for October reached -2.2%, below the -1.1% consensus estimate. This is now the fourth negative print of 2025 so far, but nowhere near as severe as June’s -9.4%, which was the lowest of the post-Covid economy. But we also saw a positive revision to the previous month +20 bps to +0.7%.
Strip out volatile Transportation costs, and we swing back to positive: +0.2% in October. Still, it’s the weakest showing since April of this year, and follows a slightly upwardly revised +0.7% from September. Non-Defense, ex-aircraft (a proxy for “normal” enterprise spending) came in at a decent +0.5%, down from the upwardly revised +1.1% the prior month. Shipment more than doubled expectations to +0.7%, with a previous-month revision up to +1.2%
What These Numbers Mean for the Market
Obviously, a return to stronger growth and productivity is good for the economy overall. However, it also adds to the likelihood that the Fed will put a pin in rate cuts going into the new year — specifically, at January’s FOMC meeting, which already was showing just a +24% chance of a cut prior to this release. But it does explain why market participants would be riding indexes lower ahead of today’s opening bell.
Once regular trading is underway today, December Consumer Confidence numbers are expected to improve to 91.7 from 88.7 posted last month. Minutes ahead of the bell, we’ll see Industrial Production and Capacity Utilization numbers from November, which are expected to come in relatively muted. But who knows? Maybe we’ll see some upward surprises there, as well.
Questions or comments about this article and/or author? Click here>>