The U.S. Bureau of Economic Analysis (BEA) will release the first preliminary figures for third-quarter gross domestic product (GDP) on Tuesday at 1:30 p.m. Japan time.
Analysts expect the data to show annualized growth of 3.2%, following a 3.8% expansion in the previous quarter.
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Market expects steady GDP expansion to continue in the three months to September
U.S. growth appears to have picked up pace after contracting 0.5% in the three months to March, and the expected reading of 3.2% should indicate healthy economic development, albeit lower than last time.
And indeed, US growth doesn’t seem to matter these days. Instead, the focus is on weakness in the labor market. It also has implications for the future of the Federal Reserve and monetary policy, which is clearly linked to the slowdown in employment conditions.
Alongside the GDP headline, the BLS releases the GDP Price Index, also known as the GDP deflator. It measures inflation for all domestically produced goods and services excluding imports, including exports. The index was 2.1% in the second quarter, which is quite encouraging considering it was 3.8% at the beginning of the year.
It is also worth noting that, according to the latest estimates, the real GDP growth rate (seasonally adjusted annual rate) for the third quarter of 2025, based on the Atlanta Fed’s GDPNow model, is 3.5%. This number is not an official forecast, but as the Atlanta Fed’s site points out, it serves as a “current estimate of real GDP growth based on available economic data for the quarter currently measured.”
However, there are some caveats. Steady job creation throughout the second quarter contributed significantly to stabilizing consumption levels. That won’t be the case in the third quarter, as the labor market has eased beyond what the Fed considers comfortable.
The latest nonfarm payrolls (NFP) report showed the unemployment rate rose to 4.6% in November, higher than the expected 4.4%. The number of jobs created in the same month accounted for 64,000 people, but the previous month’s figure has been revised downward, meaning that the number of jobs created in August and September combined was 33,000 fewer than the previous report. Data for October is missing because the employment situation clearly deteriorated due to the government shutdown.
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So, on the one hand, looking at the projections and the Atlanta Fed’s GDPNow model, it looks like GDP will end up above 3%. On the other hand, if the labor market deteriorates, this number could drop significantly.
When will the gross domestic product print release be released and what impact could it have on the US dollar index?
As previously mentioned, the US GDP report is scheduled to be released on Tuesday at 13:30 GMT and is expected to have an impact on the US dollar (USD). Given the ongoing winter break and the resulting drop in trading volume, the market may overreact.
Given the widespread weakness of the US dollar, any negative outlook would likely have a wider impact on the US currency, causing it to depreciate further. Conversely, a better-than-expected number could provide some relief to USD bulls, but it is still unlikely to change the prevailing bearish trend.
FXStreet Chief Analyst Valeria Bednarik said:
“Prior to the announcement, the U.S. Dollar Index (DXY) was hovering around 98.30, not far above its December low of 97.87. From a technical perspective, DXY is bearish. On the daily chart, the 100 Simple Moving Average (SMA) flat around 98.60 is attracting selling interest, capping any upside. On the same chart, the 20 is bearish, reflecting increased selling pressure. The SMA is accelerating its slide above the larger value. Finally, the same chart shows that the technical indicator maintains a downward slope within negative levels with lower lows ahead.
Bednarik added:
“An unfavorable GDP report could push DXY towards the aforementioned monthly lows, with an additional slide revealing an intraday low of 97.46 since September 30th. The number approaches the 97.00 threshold and the decline is likely to slow. Friday’s high of 98.42 provides immediate resistance above the 100-day SMA at 99.00.
