Since March 2022, the central bank has increased its key rate from nearly zero to around 5.4% in an effort to curb inflation. This rate peaked at a substantial 9.1% in June of last year. Despite these measures, consumer spending has remained strong, driving a notable 4.9% annual growth rate in the third quarter (July-September). This robust spending has led businesses to raise prices across various sectors.
Excluding volatile food and energy costs, core prices rose by 0.3%, with core inflation moderating to 3.7%, the slowest pace since May 2021. Consumer spending increased a robust 0.7% last month, aligning with the central bank’s forecast for this quarter.
Federal Reserve Chair Jerome Powell anticipates a “proceed carefully” approach in the coming months, suggesting that the central bank will continue to closely monitor inflation trends and economic indicators before making further policy decisions. These statistics underscore a resilient consumer sector that continues to support economic growth despite persistent inflation and high-interest rates. The widespread expenditure across various sectors of the economy is intensifying inflation further.
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Source: Economy - investing.com
