U.S. Inflation Edges Up, But Remains Below Expectations

(MENAFN- The Rio Times) Inflation in the US edged up to 2.4% in November 2024, according to the latest PCE report. This increase, while modest, highlights the ongoing challenge of managing price stability. Here's why this matters:

The Federal Reserve targets a 2% inflation rate. November's 2.4% rise, though below expectations, signals a persistent struggle to reach this goal.

Core PCE inflation , excluding volatile food and energy prices, remained steady at 2.8%. This stability suggests underlying price pressures are still present.

Consumer spending grew by 0.4%, outpacing personal income growth at 0.3%. This indicates consumers are spending more than they earn, potentially straining household finances. The personal saving rate dropped to 4.4%, reflecting this trend.

Energy prices fell by 4.0% year-over-year, providing some relief. However, food prices rose by 1.4%, affecting household budgets differently across income levels. These fluctuations underscore the uneven impact of inflation.



The Federal Reserve recently cut interest rates by 0.25 percentage points, marking the third reduction in 2024. This cautious approach reflects concerns about inflation's persistence.

Economists expect consumer spending growth to slow from 2.7% in 2024 to 2.2% in 2025, influenced by slower employment growth. Global supply chain issues, though less severe, still affect prices.

The housing market, particularly rental costs, remains a significant inflation driver. The incoming administration's policies could introduce new variables, complicating the Fed's efforts to balance growth with price stability.

In summary, November's inflation data reveals a delicate balance. The Federal Reserve must navigate these economic currents carefully, ensuring stability without stifling growth. This story matters because it directly impacts your wallet, your spending power, and the broader economic landscape.

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