Bloomberg - Evening Briefing - America’s ‘stellar summer’

Bloomberg Evening Briefing

Economists raised their US growth projections through early 2024 and trimmed the odds of any downturn to a one-year low as consumers continue to spend. The American economy probably expanded at an annualized 3.5% rate in the third quarter, the fastest in nearly two years, as forecasters marked up their household spending forecasts. And while growth is seen slowing in the following two quarters, economists in the latest Bloomberg monthly survey still raised their estimates for gross domestic product.

As always, it’s about the jobs. A brawny US labor market continues to support household spending despite the burden of high borrowing costs and lingering inflation. Employment projections for the next year were even revised higher. “The US economy has had a stellar summer,” said James Knightley, chief international economist at ING. “Robust consumer spending has been the main driver, with households keen to maintain their lifestyles by tapping savings and borrowing on credit cards while inflation continues to eat into spending power.” 

Here are today’s top stories

Hamas released two US citizens who had been held captive in Gaza among hundreds kidnapped when the militant group launched its surprise attack on Israel on Oct. 7. US and European officials have been pressing Israel to delay a ground invasion of the territory and allow time for talks aimed at freeing more hostages. Leaders from around the region are heading to Cairo for a Saturday summit on the crisis, with China and Germany also sending envoys. President Joe Biden, who urged Americans in a prime-time speech Thursday to support Ukraine and Israel, said the first aid deliveries from Egypt should reach Gaza within two days.

Israel relies almost entirely on imported oil, and the war with Hamas has disrupted the country’s main terminal on the Mediterranean. But there’s a long-standing Plan B: a 158-mile pipeline linking the sliver of Israeli coast on the Red Sea with the country’s oil refineries.

The Eilat-Ashkelon Pipeline oil terminal near Eilat, Israel. Photographer: Menahem Kahana/AFP/Getty Images

United Auto Workers President Shawn Fain indicated Friday that he is close to a deal with all three unionized automakers, but also warned that getting to the finish line could require striking more plants to pressure the companies into some final concessions. Fain didn’t call for any more walkouts, saying he had received improved offers from General Motors and Stellantis. Still, he told his members that there is “more to be won.”

American Express saw spending volumes on its cards slow faster than expected in the third quarter as small business and corporations alike pulled back. For much of the last few years, Amex’s total network volume has benefited from a resurgence in travel following the pandemic. Now, though, growth in overall spending on the firm’s cards is slowing from those post-pandemic highs.

An executive and two former employees of WPP, one of the world’s biggest advertising companies, are said to have been arrested in China. The arrests involved WPP’s GroupM media trading division and included a raid on offices in Shanghai. Beijing has been intensifying its scrutiny of western businesses amid growing tensions with the US.

Republicans abandoned Donald Trump loyalist Jim Jordan on Friday as their nominee for House speaker, infuriating his far-right brethren and deepening turmoil among lawmakers. House Republicans voted 112 to 86 in a secret ballot to rescind official backing for Jordan, the second speaker nominee whose candidacy has collapsed because of seething divisions and distrust within the party.

The US conducted a high-explosive experiment at a nuclear test site in Nevada just hours after Russia revoked a ban on atomic-weapons testing, prompting concerns of a new arms race between the world’s top nuclear powers. The Energy Department, which oversees the US stockpile of more than 5,000 nuclear weapons, said Wednesday’s test in southern Nevada used chemicals and radioisotopes to “validate new predictive explosion models” that can help it to detect atomic blasts in other countries. 

What you’ll need to know tomorrow

Ozempic for Kids? Drugmakers Think So

Pharmaceutical companies are looking to get buzzy weight-loss shots approved for younger and younger patients. Eli Lilly is said to be planning to test its diabetes drug Mounjaro for patients six and up with obesity. Novo Nordisk A/S is also testing Saxenda—an older and less powerful version of its blockbuster drugs Ozempic and Wegovy—in kids as young as six.

Novo Nordisk is testing Saxenda on kids as young as six. Photographer: Mohammed Al Ali/Shutterstock

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