The slowdown in core inflation in the US demonstrates that the US economy is experiencing continued strength and generates expectations regarding the Fed’s next step.
The real US economy remains strongsince the inflationary pressures appear to be dimming, as reported this Friday Capital Economicsa leading economic research company.
He Price index of Personal Consumption Expenditure (PCE)which excludes food and energy, posted a modest month-on-month increase in 0.11% in November, the smallest increase in the last six months. This came after two consecutive months of advances of approximately 0.25%, above the Federal Reserve goal.
Core inflation
With the November data, the three-month annualized core inflation rate fell from 2.8% to the 2.5%, although the semiannual rate experienced a slight rebound from 2.3% to 2.4%.
Despite these changes, the annual inflation rate remained stable in 2.8%. For their part, the prices PCE generalwhich include food and energy, rose by 0.13% month-on-month, and the annual inflation rate experienced a slight recovery until 2.4% from 2.3%.
Regarding consumer spending, the real consumption increased 0.27% in November. Furthermore, the revised figures from the previous months led to an upward adjustment of the forecast for consumption growth in the fourth quarter, which is now expected to be around 3%, which means a slight increase compared to previous predictions.
Gross Domestic Product
Capital Economics also provides for a slight acceleration in GDP growth in the fourth quarter, until 3.3%, in front of 3.1% of the third quarter.
These data, taken together, suggest the US economy is experiencing continued strengthcoupled with softening price pressures, which is consistent with the Federal Reserve’s goals for the economy.
Source: Ambito
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