| I'm Chris Anstey, an economics editor in Boston. Today we're looking at how the US economy weathered its latest benchmark revision. Send us feedback and tips to ecodaily@bloomberg.net or get in touch on X via @economics. And if you aren't yet signed up to receive this newsletter, you can do so here. - Six of the seven US battleground states expected to decide this year's presidential election saw faster growth than the US economy as a whole.
- Chinese stocks rallied again on the latest easing moves, but the jury is still out for economists on the change in policy direction.
- Germany's government is poised to cut its prediction for Europe's biggest economy.
Early stages of economic slowdowns can be obscured by indicators that may look strong when they're first released, but later turn out to be softer after time has passed and statisticians have pored over the data and revised the information. So cautioned Citigroup economists last week ahead of benchmark revisions to US output and income data. They noted that just last month the Labor Department removed some 818,000 in payroll gains from the 12 months through March. That added to fears of a sharp turn in the job market. But this time around, revisions gave a picture of greater strength, not weakness. There was an upgrade to GDP growth, with Thursday's release showing a 5.5% average inflation-adjusted expansion rate from the second quarter of 2020 through 2023, up from 5.1%. The Bureau of Economic Analysis also boosted income figures over recent years. That in turn saw a significant lift to the savings rate, which had in the previous set of calculations recently hit 2.9% — the lowest since the global financial crisis, after excluding a brief moment during Covid. The new estimate showed a 4.8% ratio for August. That suggests households haven't been quite as hard-pressed to maintain their spending as previously thought. Goldman Sachs — which this newsletter noted had viewed the savings rate as likely to be revised up — still sees the current data as undercounting investment income. As economists at CIBC put it last week, "data revisions can be an economist's friend or foe, depending on whether they enhance or negate the facts you've been drawing on to support your outlook." This time, the data offered "welcome news" to those like CIBC in the soft-landing camp. Still, in the end these data are backward looking. As for Citigroup, which has been warning of a harder landing, Veronica Clark and Andrew Hollenhorst cautioned "we still think businesses are reaching the point where attempts to reduce (now even more) elevated labor costs will start to result in layoffs." More on that score with Friday's September jobs report. - Coming up later today: German inflation will provide the final big piece of data before the overall euro-zone consumer-price number tomorrow. European Central Bank President Christine Lagarde will speak just after the German figures are released.
- China's factory activity continued to contract while the services sector slowed in September.
- Three of China's largest cities eased rules for homebuyers, following through on the central government's latest efforts to prop up the embattled property sector.
- Australia posted back-to-back budget surpluses for the first time in 16 years.
- US dockworkers are preparing to strike. The boost in demand from the start of a global interest rate easing cycle could be overshadowed by these looming strikes across North America's ports that's set to upend trade everywhere.
 The appetite of Federal Reserve policymakers for another large interest-rate cut in November may come into better focus in the coming week as Jerome Powell addresses economists and the government issues new employment numbers. The Fed chair will discuss the US economic outlook at a National Association for Business Economics conference on Monday. At the end of the week, the September jobs report is expected to show a healthy, yet moderating, labor market. See here for the rest of the week's economic events. Taking another look at Fed policymakers' updated set of economic and policy-rate projections from earlier this month, Evercore ISI economists picked up on an underlying assumption: the short-term neutral interest rate has fallen. Neutral is the setting at which the Fed is neither restraining nor stoking the economy. Many economists viewed the rate over the shorter term as having risen in recent years thanks to dynamics including a big influx of immigrants and fiscal spending. That in turn helped explain how come the economy appeared so resilient to historically rapid Fed rate hikes. Fed officials slashed their year-end 2025 rate forecast, but also boosted their unemployment rate call. Running the estimates through a macro model, "these results suggest that the resilience that had characterized the US economy as recently as June" has gone, and that "the median Fed policymaker now assesses that the short-run neutral rate is roughly back down to its longer-run level," Evercore adviser John Roberts wrote. | 
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