27-12-2024 15:45
US core PCE drops despite strong economy
Currency strategists at Capital Economics point out something odd about the US economy! According to their estimates, the real economy remains resilient, while inflationary pressure is weakening. It is quite a paradox!
Reports show that in November, the core personal consumption expenditures (PCE) index, which excludes food and energy, saw a modest monthly increase of 0.11%. This is the smallest rise in the past six months. For two consecutive months, the index only grew by 0.25%, experts highlight.
Following the November reports, the three-month annualized core inflation rate dropped to 2.5% from the previous 2.8%. At the same time, the six-month figure edged up slightly to 2.4% from 2.3%.
Despite the shifts, the annual inflation rate in the US held steady at 2.8%. As for overall PCE prices, including food and energy, they rose by 0.13% in a month. Meanwhile, the annual inflation rate in the US slightly recovered, reaching 2.4%.
Consumer spending also showed a rise, with real consumption in the US increasing by 0.27% in the last month of autumn. As a result, data for the previous month was revised, boosting the consumption growth forecast for the fourth quarter of 2024 to 3.0%.
Capital Economics analysts expect slight GDP growth acceleration in the fourth quarter, projecting 3.3% compared to 3.1% seen in the third quarter of 2024.
Current reports confirm that the US economy remains strong. Its strength pairs nicely with moderate price pressures, aligning with the Federal Reserve's goals and supporting economic expansion.
*The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.
Published 27 December 2024
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