US economy hot, Europe getting hot, Japan ... maybe not

The US economy grew faster than expected in the third quarter, based on the advance GDP estimates by the Bureau of Economic Analysis. Bloomberg reports the GDP release as well as inflation-related numbers and consumer sentiment.

U.S. economic growth quickened to a 3.8 percent annual rate in the third quarter as the economy overcame higher energy costs and Hurricane Katrina.

The Commerce Department's first estimate of gross domestic product for the quarter, released today in Washington, exceeded the median forecast and compares with a 3.3 percent pace from April through June...

Wages increased 2.3 percent in the third quarter from the same three months last year, the smallest year-over-year rise since record-keeping began in 1981, the Labor Department said separately. Total U.S. labor costs rose 0.8 percent in the third quarter after a 0.7 percent rise in the previous three months...

Consumer confidence fell this month to the lowest level in 13 years because of energy costs. The University of Michigan said today that its index of sentiment declined to 74.2 from September's 76.9...

The government's personal consumption expenditures index...rose 3.7 percent after a 3.3 percent gain in the second quarter. The index excluding food and energy...rose at a 1.3 percent annual rate, the slowest since a 1 percent pace in the second quarter of 2003...

The GDP price index...rose at a 3.1 percent annual rate, following a 2.6 percent second-quarter gain.

The report also showed that consumer and government spending, at 3.9 percent and 3.2 percent respectively, accounted for much of the acceleration in GDP growth. Private investment, however, showed deceleration.

The economic news out of Europe also pointed towards stronger growth and inflation.

Consumer prices in the 12-nation euro area rose 2.5 percent from a year earlier after rising 2.6 percent in September, the most in more than three years, the European Union's statistics office in Luxembourg said today... Inflation expectations are also rising... Money supply growth...last month also accelerated to the fastest rate since July 2003 as the ECB said its preferred measure, M3, rose 8.5 percent from a year earlier.

[The European Commission] said today its index of sentiment among industrial executives rose to minus 6 in October. A similar gauge of consumers increased to minus 13 and a measure for the services industry reached 15, the highest since July 2001.

It is a cooler picture in the supposedly-recovering Japanese economy.

Industrial production rose just 0.2 percent in September from August, government data showed on Friday, much weaker than the 2.0 percent rise economists had expected. Although manufacturers surveyed in the report forecast gains of 2.4 percent in October and 1.9 percent in November, output for the July-September quarter fell a net 0.3 percent from the previous quarter...

The core consumer price index (CPI) for the Tokyo area, a leading indicator for nationwide prices, was down 0.3 percent in October from a year earlier, compared with a consensus forecast of a 0.2 percent decline. The nationwide core CPI for September was down 0.1 percent from a year earlier, compared with an average forecast for a fall of 0.2 percent...

Average spending by households of salaried workers, a key gauge of overall personal consumption, fell a real 0.4 percent in September from the same month last year and slipped 0.2 percent from the previous month...

But the jobless rate fell to 4.2 percent in September from August's 4.3 percent, matching a seven-year low set in June. The number of employed, at 64.37 million people, was the highest since August 2001.