By Noel Randewich
(Reuters) – The U.S. economy is likely growing at a 5.8% annualized rate in the third quarter, the Atlanta Federal Reserve’s GDPNow forecast model showed on Wednesday following the release of data on housing starts and industrial production.
This was faster than the 5.0% pace estimated by the Atlanta Fed’s GDPNow model on Tuesday.
The regional Fed bank’s GDPNow model typically diverges from reality early in any given quarter, and analysts say they expect the estimate to drop as more data comes in.
But it is a signal that the economy, far from falling into recession, is coping with 5.25 percentage points of U.S. Federal Reserve rate hikes since March 2022.
U.S. single-family homebuilding surged in July and permits for future construction rose amid an acute shortage of previously owned houses.
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Other data showed output at factories recovered 0.5% in July after declining 0.5% in June.
Separately, Deutsche Bank increased its estimate for third quarter real gross domestic product, which takes inflation into account, to 3.1% from 1.5%.
The latest indications of a resilient U.S. economy come as traders largely expect the Fed has completed its aggressive campaign of interest rate hikes.
(Reporting by Noel Randewich; additional reporting by Ann Saphir; editing by Barbara Lewis)