The U.S. Bureau of Economic Analysis (BEA) will release its first preliminary estimate of third-quarter Gross Domestic Product (GDP) on Tuesday at 1:30 p.m. GMT.
Experts predict that this data will show annual growth of 3.2%, a slight decrease from the 3.8% increase in the previous quarter.
The market expects stable GDP growth to continue for the next three months, through September 2024.
The US economy appears to have regained momentum after a 0.5% contraction in the three months ending in March, and the forecast for this quarter, while lower than before, suggests the economy is growing steadily.
In reality, economic growth is no longer the main concern for the US. What experts are more worried about is the weakening labor market , along with the Federal Reserve's (Fed) and future monetary policy , which are closely linked to employment.
In addition to GDP, the BLS will also publish the GDP deflator – a price index reflecting the inflation rate of all domestically produced goods and services, including exports but excluding imports. This index stood at 2.1% in the second quarter, a relatively positive increase compared to 3.8% at the beginning of the year.
It's also worth noting that the Atlanta Fed's GDPNow forecasting model estimates real GDP growth (seasonally adjusted) for the third quarter of 2025 at 3.5% based on the latest data. This figure is not an official forecast, but as the Atlanta Fed website explains, it is "a continuously updated forecast based on available economic data for the quarter under consideration."
However, there is still a point to note: the stable job market in the second quarter greatly boosted consumer purchasing power. But in the third quarter, when the labor market becomes looser than the Fed can be comfortable with, this momentum will weaken considerably.
According to the latest Nonfarm Payrolls (NFP) report, the unemployment rate in the US rose to 4.6% in November, higher than the expected 4.4%. The number of new jobs created that month reached 64,000, but figures from previous months were revised downward, meaning the total jobs created in August and September were 33,000 lower than previously reported. Data for October was missing due to the government shutdown, which further exacerbated the already challenging labor situation.
Therefore, based on forecasts and the Atlanta Fed's GDPNow model, GDP could exceed 3%. However, if the labor market deteriorates, this figure could be significantly lower.
When will the Gross Domestic Product (GDP) figures be released, and how might they affect the US dollar index?
As mentioned above, the US GDP report will be released at 13:30 GMT on Tuesday, and is expected to have a significant impact on the USD . Market reaction may be amplified due to the ongoing winter holiday and reduced trading volume.
With the US dollar weakening across the board , poor GDP figures could trigger a sharp sell-off, putting further downward pressure on the dollar. Conversely, if the numbers exceed expectations, USD speculators might regain hope, but it's unlikely to reverse the current downward trend.
FXStreet's chief expert, Valeria Bednarik, commented:
“The US Dollar Index (DXY) is fluctuating around 98.30 just before the data release, not far from the December low of 97.87. Technically, the DXY is in a downtrend. On the daily chart, the 100-day simple moving Medium (SMA 100) is flat around 98.60, creating strong selling pressure and halting the upward momentum. The SMA 20 is rapidly declining above the SMA 100, indicating increasing selling pressure. Other technical indicators also continue to move downwards into negative territory, consistent with expectations of a further decline in the DXY.”
Bednarik added:
“If GDP figures are low, the DXY could fall to last month’s Dip , then continue toward 97.46 – the Dip from September 30th. If it falls further, the index will approach 97.00, where the downward momentum may slow. Friday’s high of 98.42 will be the nearest resistance, followed by the 100-day SMA at 98.60. If it breaks through this level, 99.00 will be the next hurdle.”
