The annual pace of price increases is getting ever closer to the Federal Reserve's 2% target.
While the cumulative impact of inflation has had a pronounced effect on the U.S. economy, the view in relative terms is getting progressively better. The annual pace of price increases is nudging ever closer to the Federal Reserve's 2% target , a trend likely to be exemplified Thursday when the Commerce Department releases its own inflation numbers at 8:30 a.m. ET. Judging by the personal consumption expenditures price index, inflation was expected to run at just a 0.
Indeed, the Commerce Department reported Wednesday that real GDP in the third quarter rose at a seasonally adjusted 2.8% pace, a small step below the 3% rate in Q2 and 0.3 percentage point shy of the Dow Jones estimate. Within the GDP report, the PCE rate for the quarter was just 1.5%, suggesting that the battle has been won. However, there's more to the picture. Core inflation, which excludes food and energy costs, has proved more resilient. The estimates for September are 0.
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