Economists believe that the US is likely to enter a recession if the GDP numbers reveal a decline. A decline in the third quarter would be a consecutive decline three times. However, the fact that two-quarters of the US economy is contracting gives traders a glimmer of hope that the current figures will be positive.
The previous GDP numbers revealed that the economy fell into a technical recession. The previous GDP figure stood at 0.6%.
However, many speculate that if the GDP increases this time, it will push the crypto market to bullish momentum. But the crypto market actually displayed a bullish rally when the numbers were out on September 29. In that context, there is also a possibility that a rise in GDP can cause a reversal of the current bullish stance of the crypto market.
US GDP increases for the first time this year
As the US GDP numbers are out, the GDP grew 0.6% in the third quarter. The numbers reveal a 2.6% annual growth rate after two-quarters of constant contraction. This is showing slight signs of inflation easing as the numbers were let out by the Bureau of Economic Analysis on Thursday.
The current 2.6% numbers reveal an increased annual rate as compared to the Dow Jones estimate of 2.3%.
“Overall, while the 2.6% rebound in the third quarter more than reversed the decline in the first half of the year, we don’t expect this strength to be sustained.” “Exports will soon fade and domestic demand is getting crushed under the weight of higher interest rates. We expect the economy to enter a mild recession in the first half of next year,” Paul Ashworth, chief North America economist at Capital Economics.
The exact effect of the GDP numbers on the crypto market can’t be assessed at present. The cryptocurrency market, which has been on a bullish streak for the past two days, can move in either direction. We have to sit and wait for that assessment.