U.S. inflation accelerates in September; third-quarter GDP rises 3.4%

Investing.com - U.S. inflation accelerated in September, while the overall U.S. economy grew by more than anticipated in the third quarter, likely maintaining expectations for a Federal Reserve interest rate hike in December.

Although the Fed opted to leave rates unchanged after its October meeting on Wednesday, markets have predicted that policymakers will opt to raise borrowing costs following its final gathering of the year on December 8-9.

The personal consumption expenditures price index rose by 0.5% last month, in line with expectations. In August, the measure from the Commerce Department stood at 0.3%. Monthly costs of gasoline and other energy products spiked by 9.2% during the month, reflecting the impact of the ongoing U.S.-Israeli war on Iran.

In the 12 months to September, PCE inflation rose 3.6%, up from 3.4% in August and also meeting estimates.

So-called core PCE inflation, which excludes volatile components like energy and food, rose by 0.3% month-on-month and 3.1% year-on-year. The Fed keeps particularly close tabs on the core PCE reading as its gauges inflationary pressures.

Third-quarter gross domestic product, meanwhile, expanded 3.4%, up from 2.2% in the second quarter and expectations of 3.2%.

Original Article

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