The year-over-year reading for Core Personal Consumption Expenditure (PCE) rose to 2.0%. This is the Fed’s preferred inflation measure and is right on target.
However, given that U.S. GDP growth rising above a 3.5% annualized rate in the third quarter the expectation is for inflation to rise above the Fed’s target rate.
Rising wages could add upward pressure on inflation, which will give the Fed further support to continue raising interest rates. Average hourly earnings rose 2.8% year-over-year as of September 30. Read more →