Although the last key piece of economic data before the presidential election narrowly beat expectations, it captured the sharp drop in activity across the country between July and September and the challenges facing the next administration.
The economy grew at a relatively strong annualised rate of 2.8 per cent in the second quarter and economists had predicted a contraction of 0.5 per cent in the third quarter. Analysts believe the economy could contract by more than 2 per cent on an annualised basis in the fourth quarter.
However, there were more signs of a thawing in frozen credit markets yesterday. Issuance of commercial paper expanded for the first time in seven weeks according to data released by the Federal Reserve – a sign that Fed's support for the market has rekindled growth.