The Numbers of the Last Week of October
The United States Gross Domestic Product, aka the GDP, came in for Q3.
For the quarter, it was 3.4% on an annualized basis - 0.8% for the quarter. Last quarter it was 2.2% annualized. Let’s look inside…
Consumer spending contributed 2.52 percentage points. People are spending.
Private investment added 3.27 p.p.
About half of that 3.27 was attributed to equipment, like computing power for AI and data centers.
However, residential investment dropped and was a drag on GDP.
Increased imports and shrinking exports took away 3.32 p.p.
And government contributed 0.9 p.p.
So… Business investment is strong while housing investment continues to contract, but those Boomers are spending, or at least someone is. Just not as much on homes.
The GDP release also includes quarterly summaries of many measurements. And there is one that stood out. PCE, the Personal Consumption Expenditures index.
For the quarter – not the month as it is typically reported - PCE prices increased at a 2.1% annualized rate during Q3, sharply below the 5.0% pace in Q2.
That is a significant drop.
In case anyone is wondering, core PCE – the number that excludes food and fuel – fell from 3.3% in Q2 to 2.5% in Q3.
That said, the monthly PCE numbers were up, from September to October, from 3.4% to 3.6%, and core went from 3.0% to 3.1%.
Oh, well. We’ll see how that washes out when Q4 numbers arrive in January.
Finally, the new claims for unemployment continue to stay low at 194,000, the same as the previous week and below expectations of 200,000.
That’s enough numbers for now.
California spending, on such a winter’s day…
You’ve heard of California Dreaming, but there is also California Spending.
With all the talk of making temporary taxes permanent and instituting new “one-time” taxes, I thought I’d dig into how much California spends.
And here is what I found.
Measure FYE 2015 FYE 2024 Total increase Annualized growth Total spending—all budget funds $250.34 billion $452.73 billion 80.80% 6.80% State-source spending $160.29 billion $303.25 billion 89.20% 7.30% Federal-funded spending $90.05 billion $149.48 billion 66.00% 5.80% Population 38.729 million 39.341 million 1.60% 0.17% Total spending per resident $6,464 $11,508 78.00% 6.60%
Annualized inflation from 2015 to 2024 averaged 3.2%.
It’s also worth noting that real estate property taxes have increased from $58,975,000,000 in 2015 to $100,476,000,000 in 2024. That is an annual increase of 6.09% or 70.4% over that time frame.
So if you get into a conversation with someone about how Proposition 13 chokes tax revenue, just refer them to the 6.09% increase in real estate tax each year.
And that’s all I have to say about that.
Something you might not know…
There is an outfit called Kpler – a commodities data tracker whose French founders named it after Johannes Kepler. So?
Its most recent number for oil exports out of the Middle East for the week ending October 18 averaged about 24.6 million barrels per day. So again?
Prior to February 28 (yep, that’s the date it started), the average barrels exported daily were 23.3 million.
At least for one week, the region is now moving slightly more oil than before the conflict. Who knew?
Hey, I’ll hang my hat on any good news that might, maybe, somehow get energy prices to fall.
What is an S-1?
It’s something Anthropic PBC filed last week. They are the AI designers behind Claude.
It’s also something us finance snobs like to throw around, like a 10-K, 10-Q or 8-K.
An S-1 is the primary registration statement and prospectus used by companies going public through an Initial Public Offering, aka an IPO.
It goes into great detail about what challenges and opportunities there are for the company going public.
Some notes that you can use for prospect/client icebreakers:
There was no indication of what the stock price would be or the number of shares to be issued.
They will list on the National Association of Securities Dealers Automated Quotations exchange, aka the NASDAQ.
The stock symbol will be ANT.
I think once the dust settles, Anthropic should merge with Atomera Incorporated. They have the stock symbol ATOM.
The combination could be known as ATOM ANT.
“Up and at ‘em…”
That’s a long way to go for a bad joke. At any rate…
They are a public benefit company – PBC – that does NOT have to put shareholder interests first. So, maximizing shareholder wealth is not the only consideration.
Because its mandate is to do the right thing.
They also published some numbers:
As of Q3 2025, they had 950 customers that were paying more than $100,000 annually for the use of Claude and associated programs.
As of Q3 2026, that had increased to 11,900 customers. In a year.
I really dislike the phrase “That is crazy”, but, well, that really is crazy.
Revenue for the first six months of 2025 - $1,163,000,000
Revenue for the first six months of 2026 - $16,286,000,000 against expenses of $16,979,000,000.
That’s enough information for now; I’ll get into the balance sheet and the debt structure in the future, but know this: there is debt. A lot of it, and most of it is convertible (another finance snob term).
Headlines
DoorDash, Instacart OK $17B Deal – Supposedly this will create scales of efficiency. Just what we need: a more efficient way to have someone else go to the store.
Mortgage Rate Dips to 7.24% - don’t mention that to Boomers; they’ll brag about being the first on their block to get a 9.875% fixed rate back in 1990, and they were darn happy to get it, and GET OFF MY LAWN!
Nasdaq Sinks as Tech Rout Deepens – The Nasdaq was down 5.3% for the month. Amazing what happens when investors sense increased levels of risk. Or they heard a rumor at the Wednesday Happy Hour. Just keep swimming.
Two months to go, folks!
Only two months left in the year. How are you performing to plan? What have you accomplished? Where did you fall short? What worked, what didn't, and what did you learn along the way? Can you still accomplish your goal, or do you need to adjust? What are you going to do during the next 60 days to get there? If you are already at goal, what are you going to do to celebrate?!
Waaaay too many questions for a Monday morning. But it is November 1. It’s also time to firm up your goals for 2027.
Failure is the condiment that gives success its flavor. – Truman Capote
