• US economy grows by 2.8% in Q3 versus 3.0% expected
• ADP employment points to strong month for jobs in October
• US dollar heads north but more tests on the way

The US GDP report kicked off the run of crucial data for the next three days, paving the way for next week’s policy meeting by the Federal Reserve. GDP growth came in slightly below expectations in the third quarter, printing at 2.8% against forecasts of 3.0%. It marks a slight slowdown from the 3.0% annualized growth seen in Q2.

The core PCE price index for the quarter eased from 2.8% to 2.2% y/y, but this was a little stronger than the 2.1% expected.

Only a week ago, the Atlanta Fed’s GDPNow model was running at 3.4%, so the lower actual number is probably a relief for Fed policymakers worried about a re-acceleration in inflation.

However, the data was not met with the expected response by the markets as investors were more focused on the ADP employment report released 15 minutes earlier. Private employment increased by 233k in October according to ADP, far outstripping estimates of 114k.

The upbeat figure sets the stage for an upside surprise in Friday’s official payrolls report and the dollar has turned positive as a result, reversing earlier losses against the euro.