Fed’s preferred inflation gauge in November was lower than expected, but remains elevated
Published On Dec 20, 2024, 10:54 AM
The Federal Reserve's preferred inflation measure, the Personal Consumption Expenditures (PCE) index, reported an increase of only 0.1% in November, below expectations. Year-over-year, the PCE index rose to 2.4%, also less than predicted. Core PCE, which excludes food and energy, similarly increased by 0.1% and is up 2.8% year-over-year. Despite these lower-than-expected inflation figures, they still exceed the Fed's target of 2%. Personal consumption spending rose less than forecasted, while personal incomes saw a decline. This data comes following a recent 25 basis point rate cut by the Federal Reserve, indicating the central bank's careful approach to managing inflation while supporting economic growth.
Stock Forecasts
SPY
Positive
Given the recent lower-than-expected inflation data, there is potential for continued investor interest in growth sectors, particularly technology and consumer discretionary, which can benefit from lower interest rates. However, the persistence of inflation above target levels indicates ongoing economic uncertainty, which may pressure sectors sensitive to interest rate changes.
Related News
The US government could be headed for a shutdown. Here’s what that may look like.
Dec 20, 2024, 8:52 AM
Some government services American rely upon will be unaffected by a shutdown while others would become more difficult to access or suspended altogether. The effect on the economy may depend on how long any stoppage lasts.
Stock market today: Dow, S&P 500, Nasdaq futures sell-off as government shutdown looms, inflation data improves but still sticky
Dec 20, 2024, 8:53 AM
Stocks signaled another rough day of trading on Friday after the House of Representatives voted against a Trump-backed spending bill.
Fed's preferred inflation gauge shows price increases fell in November but still remain sticky
Dec 20, 2024, 8:35 AM
November's Personal Consumption Expenditures report is the latest data point that will shape future monetary policy.