Skip to main content
Tags: inflation | personal | consumption | expenditures | fed

Core Inflation Remains High at 2.7%

Core Inflation Remains High at 2.7%
(Dreamstime)

Thursday, 31 October 2024 08:52 AM EDT

Subsiding inflation is offering some relief for households, especially lower-income families, although core inflation in the 12 months through September was 2.7% for the third straight month, as measured by the personal consumption expenditures (PCE) price index.

Important: The Cold, Hard Truth About America’s Debt Future... See Here

The PCE increased 0.2% in September after an unrevised 0.1% gain in August. Economists had forecast PCE inflation climbing 0.2%.

In the 12 months through September, the PCE price index increased 2.1%. That was the smallest year-on-year rise in PCE inflation since February 2021 and followed a 2.3% advance in August. Excluding the volatile food and energy components, the PCE price index rose 0.3% after increasing 0.2% in August.

The U.S. central bank last month launched its policy easing cycle with an unusually large half-percentage-point interest rate cut, the first reduction in borrowing costs since 2020.

The Fed's policy rate is now set in the 4.75%-5.00% range, having been hiked by 525 basis points in 2022 and 2023. The Fed is expected lower rates by 25 basis points next Thursday.

The Federal Reserve tracks the PCE price measures for its 2% inflation target.

CONSUMER SPENDING

U.S. consumer spending increased slightly more than expected in September, putting it and the economy on a higher growth trajectory heading into the final three months of the year.

Consumer spending, which accounts for more than two-thirds of U.S. economic activity, rose 0.5% last month after an upwardly revised 0.3% gain in August, the Commerce Department's Bureau of Economic Analysis reported Thursday.

Economists polled by Reuters had forecast consumer spending advancing 0.4% after a previously reported 0.2% rise in August.

The data was included in the advance gross domestic product report for the third quarter, which was published on Wednesday. Consumer spending increased at a 3.7% annualized rate, the most since the first quarter of 2023, contributing the bulk of the economy's 2.8% growth pace last quarter.

Urgent: Democrats Are Leading Americans to Financial Collapse... Read More Here

Spending is being driven by a resilient labor market as well as a rise in household net worth, thanks to a stock market boom and higher house prices. But there are worries that growth is mostly being driven by middle- and upper-income households, which have more flexibility and substitutability of consumption.

© 2024 Thomson/Reuters. All rights reserved.


StreetTalk
Subsiding inflation is offering some relief for households, especially lower-income families, although core inflation in the 12 months through September was 2.7% for the third straight month, as measured by the personal consumption expenditures (PCE) price index.
inflation, personal, consumption, expenditures, fed
382
2024-52-31
Thursday, 31 October 2024 08:52 AM
Newsmax Media, Inc.

Sign up for Newsmax’s Daily Newsletter

Receive breaking news and original analysis - sent right to your inbox.

(Optional for Local News)
Privacy: We never share your email address.
Join the Newsmax Community
Read and Post Comments
Please review Community Guidelines before posting a comment.
 
TOP

Interest-Based Advertising | Do not sell or share my personal information

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
America's News Page
© Newsmax Media, Inc.
All Rights Reserved
Download the Newsmax App
NEWSMAX.COM
America's News Page
© Newsmax Media, Inc.
All Rights Reserved