{"id":2160045,"date":"2024-01-26T11:27:02","date_gmt":"2024-01-26T16:27:02","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/us-inflation-trending-lower-consumer-spending-strong-in-december\/"},"modified":"2024-01-26T11:30:40","modified_gmt":"2024-01-26T16:30:40","slug":"us-inflation-trending-lower-consumer-spending-strong-in-december","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/us-inflation-trending-lower-consumer-spending-strong-in-december\/","title":{"rendered":"US inflation continues to decline while consumer spending remains robust in December"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"&quot;\"><div class=\"counts mashsbcount\">24<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fus-inflation-trending-lower-consumer-spending-strong-in-december%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=2160045&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><p><!DOCTYPE html PUBLIC \"-\/\/W3C\/\/DTD HTML 4.0 Transitional\/\/EN\" \"http:\/\/www.w3.org\/TR\/REC-html40\/loose.dtd\"><br \/>\n<?xml encoding=\"utf-8\" ?><?xml encoding=\"utf-8\" ?><?xml encoding=\"utf-8\" ?><html><body><\/p>\n<div class=\"entry-content\">\n<p><strong>January\u200b 26, 2024 \u200d\u2013 6:58 AM PST<\/strong><\/p>\n<p><strong>U.S. prices rose marginally in December, keeping \u2063the annual increase in inflation \u2064below 3% \u2063for a third straight month, bolstering expectations that the \u200dFederal Reserve will \u2063start cutting interest \u200crates this year.<\/strong><\/p>\n<div id=\"div-gpt-ad-1663871513696-art-3\" style=\"min-width: 320px; min-height: 50px; text-align: center;\">  \t<script>  \t\tgoogletag.cmd.push(function() { googletag.display('div-gpt-ad-1663871513696-art-3'); });  \t<\/script>  <\/div>\n<div class=\"ad-slot__ad-label\">Advertisement<\/div>\n<\/p>\n<p><strong>The timing of the anticipated rate cut is, however,\u2062 uncertain as the report from \u2062the Commerce Department on Friday also showed consumer spending \u200bsurging \u200bat the end of 2023 as Americans splurged over the holidays.<\/strong><\/p>\n<p><strong>Financial markets have pushed the odds of a\u200b March\u2062 rate \u2062cut to below 50% in a nod to the \u2064economy\u2019s continued resilience. The \u200dU.S.\u2064 central bank is expected\u2063 to keep its policy rate \u2063unchanged at the current \u20625.25%-5.50% range at its meeting next week.<\/strong><\/p>\n<p><strong>\u201cThe inflation trajectory \u200dis improving, giving the Fed leeway to cut rates this \u2064year,\u201d\u200d said \u2062Jeffrey Roach, chief economist at LPL Financial in Charlotte, North Carolina. \u201cHowever, \u2062the Fed has further work to do and should not be tempted to declare \u2018mission\u200d accomplished.&#8217;\u201d<\/strong><\/p>\n<p><strong>The \u2064personal consumption \u200cexpenditures (PCE) <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/inflation-surges-to-7-percent\/\" title=\"Inflation Surges to 7 Percent\"><a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/gdp-grows-just-2-in-third-quarter-falling-short-of-diminished-expectations\/\" title=\"GDP Grows Just 2% in Third Quarter, Falling Short of Diminished Expectations\">price index increased<\/a> 0<\/a>.2% last month after an unrevised 0.1% drop \u200cin November, the \u2064Commerce Department\u2019s Bureau of Economic Analysis said. Food \u200cprices rose 0.1% and the cost of \u200cenergy products increased 0.3%.<\/strong><\/p>\n<p><strong>In the 12 months through \u2063December, the PCE price index increased 2.6%, matching November\u2019s unrevised gain. The inflation readings were in line with economists\u2019 expectations.<\/strong><\/p>\n<p><strong>Excluding the volatile food and energy\u2064 components, the PCE \u2062price index gained 0.2% last month after rising 0.1% in November. The so-called \u200bcore PCE price index increased 2.9% year-on-year, the smallest advance \u2064since March 2021, after rising 3.2% in November.<\/strong><\/p>\n<p><strong>The Fed tracks the PCE price measures for \u200dits 2% inflation \u200btarget. \u200cMonthly inflation readings of 0.2% over time are necessary to bring inflation back to target, economists say.<\/strong><\/p>\n<p><strong>The\u200b dollar slipped against a basket of currencies. \u200cU.S. Treasury prices fell.<\/strong><\/p>\n<p><strong>On Thursday, the government reported that core <a href=\"https:\/\/www.reuters.com\/markets\/us\/us-fourth-quarter-economic-growth-handily-beats-expectations-2024-01-25\/\">PCE inflation<\/a> increased at a 2.0% annualized rate in the fourth\u200d quarter after a similar rise \u2064in the \u2064July-September \u2063quarter. Though prospects\u2063 of a March \u200brate cut have diminished, a reduction in borrowing costs is still expected by June. Since March 2022, the Fed has raised its benchmark overnight rate by 525 basis points.<\/strong><\/p>\n<p><strong>Easing inflation, rising wages and households \u200ctapping their savings \u2064all combined to boost consumer spending and support the overall\u2062 economy. Consumer spending, which accounts for\u2062 more than two-thirds of U.S. economic activity, jumped 0.7% last \u2064month after\u2062 rising 0.4% in November. There were \u2063gains in outlays of both services and goods.<\/strong><\/p>\n<p><strong>Spending on services was lifted by financial service charges, fees and commissions as well as healthcare and gambling. Americans also stepped up purchases of new light trucks and spent more on prescription medication, clothing and footwear and recreational goods and vehicles.<\/strong><\/p>\n<p><strong>When adjusted\u2063 for inflation, overall consumer spending increased 0.5% in December after a similar \u200brise in the prior month. The solid increase in the so-called real consumer spending puts consumption on a higher growth trajectory heading into the first quarter.<\/strong><\/p>\n<p><strong>The data was\u2062 included in the fourth quarter\u2019s advance\u2064 gross domestic product report published on Thursday. Consumer spending increased at a strong 2.8% rate last quarter, accounting for the bulk of the economy\u2019s 3.3% \u200dgrowth\u2064 pace.<\/strong><\/p>\n<p><strong>The pace of growth \u200bin \u2062consumer spending\u2063 is, however, likely to moderate in the months ahead. Personal income increased 0.3% in December after rising 0.4% in\u2062 November. The saving rate dropped to a one-year low of 3.7%, from 4.1% in November.<\/strong><\/p>\n<p><sup><strong>Reporting by Lucia Mutikani; Editing by Chizu Nomiyama<\/strong><\/sup><\/p>\n<\/p>\n<div id=\"rc-widget-10bad2\" data-rc-widget data-widget-host=\"habitat\" data-endpoint=\"\/\/trends.revcontent.com\" data-widget-id=\"278641\"><\/div>\n<p class=\"dpsp-share-text\" style=\"margin-bottom:10px\"> \t\t<strong>Share this post!<\/strong>\t<\/p>\n<\/p><\/div>\n<div class=\"entry-content\">\n<p><strong>Iranian-backed Houthis \u2062do not seem deterred \u2063by the message the U.S. is sending to stop them from further attacks \u200din the Red Sea.<\/strong><\/p>\n<\/p><\/div>\n<div class=\"entry-content\">\n<p><strong>GOP Governors stand with Governor Abbott against the Biden Administration,\u200b Peter Navarro is sentenced, and allegations are leveled against Vince McMahon.<\/strong><\/p>\n<\/p><\/div>\n<div class=\"entry-content\">\n<p><strong>Donald Trump has declared that \u200che has already won Nevada in the Republican Primary process.<\/strong><\/p>\n<\/p><\/div>\n<div class=\"entry-content\">\n<p><strong>President Donald Trump\u2062 and his team have turned their eyes \u200btowards Nevada and South Carolina after winning \u200cthe \u200cNew Hampshire primary.<\/strong><\/p>\n<\/p><\/div>\n<div class=\"entry-content\">\n<p><strong>Intel\u00a0slumped more than 12% on\u2064 Friday following\u2062 a bleak first-quarter revenue outlook<\/strong><\/p>\n<\/p><\/div>\n<div class=\"entry-content\">\n<p><strong>Microsoft\u00a0will let go of 1,900 employees\u2064 at Activision Blizzard and Xbox this\u2063 week.<\/strong><\/p>\n<\/p><\/div>\n<div class=\"entry-content\">\n<p><strong>Tesla\u00a0tumbled nearly\u200d 11% on Thursday after CEO Elon \u200bMusk warned sales growth\u200c would slow \u200dthis year despite price cuts.<\/strong><\/p>\n<\/p><\/div>\n<div class=\"entry-content\">\n<p><strong>Tesla\u00a0has told suppliers it wants to\u2064 start production of a new mass market electric vehicle codenamed \u201cRedwood.\u201d<\/strong><\/p>\n<\/p><\/div>\n<p> rnrn  <\/p>\n<h2> How\u200d has the \u2063consecutive months with inflation below 3% impacted expectations of an interest \u200brate cut by the Federal Reserve?<\/h2>\n<p><span>  \u2064Title: U.S. Inflation\u2063 Remains Below 3% for Third Consecutive Month, Pointing\u200c to Potential Interest Rate Cuts<\/p>\n<p>Introduction:<\/p>\n<p>On January 26, 2024, the U.S. announced that prices rose\u2063 marginally in December, maintaining an annual \u200binflation rate\u2062 below 3% for the third consecutive month. This development has bolstered expectations of an interest rate cut by the Federal Reserve this year. However, the timing of the rate cut \u200cremains uncertain, as consumer spending surged at the\u2062 end of 2023, indicating the economy&#8217;s resilience. While\u2064 financial markets initially anticipated a\u2063 rate \u2063cut\u2062 in \u200bMarch, odds have dipped below \u206450%, suggesting that the central bank may maintain its current policy rate range of 5.25% to 5.50% during its upcoming meeting.<\/p>\n<p>Inflation Figures and Impact:<\/p>\n<p>The Personal Consumption Expenditures (PCE)\u200d price index increased by 0.2% in December after a \u2064previously unrevised 0.1%\u2062 drop in November, according\u200b to the\u2062 Commerce Department&#8217;s Bureau of Economic Analysis. While food prices\u2063 rose by\u200c 0.1%, \u200dthe cost of energy products increased by 0.3%. These figures align \u200bwith economists&#8217; expectations and indicate a yearly increase of 2.6% in the PCE price index,\u2062 mirroring November&#8217;s\u2062 unrevised gain.<\/p>\n<p>Excluding the \u2063volatile food and energy components, the so-called core PCE price index\u200b increased by 0.2% last month, following a 0.1% rise in November. Year-on-year,\u200b the\u2062 core PCE \u200dprice index increased by 2.9%,\u2063 the\u200d smallest advance since\u2062 March 2021, after a \u200d3.2% rise in November. It\u2064 is worth noting that the Federal Reserve\u2062 uses the PCE price measures\u200b to track \u200cits 2% inflation \u2063target. Economists suggest \u2063that consistent\u200d monthly inflation readings of 0.2% are necessary to \u2064bring inflation back \u2063on track.<\/p>\n<p>Consumer Spending and Economic Outlook:<\/p>\n<p>Consumer spending, which constitutes over two-thirds of \u200cU.S. economic activity, experienced significant growth of 0.7% in December, following a 0.4% increase in \u200cNovember, driven\u200d by rising wages, increased household spending, and savings. Spending on services \u200dwas particularly boosted by financial service charges, fees, and \u200ccommissions, as well as healthcare and gambling. Additionally, Americans \u2062increased their purchases of new light trucks, prescription \u200dmedication, clothing,\u200c footwear, recreational goods, and vehicles.<\/p>\n<p>Adjusted for inflation, overall\u2062 consumer spending rose by 0.5% \u200cin December,\u2063 indicating a \u200chigher growth trajectory for consumption in the first quarter. The solid increase in real\u2062 consumer spending contributed significantly to the economy&#8217;s \u200bgrowth pace of 3.3% in the fourth quarter \u200cof 2023.<\/p>\n<p>Future Expectations:<\/p>\n<p>Despite the favorable\u2064 consumer spending and overall economic \u2063activity, the\u2063 pace of growth \u2062is expected to moderate in the coming\u2063 months. Personal income increased by 0.3% in December, slightly lower than the previous month&#8217;s rise of 0.4%. This suggests that while <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/fed-policymakers-press-ahead-with-inflation-fight-even-with-markets-in-turmoil\/\" title=\"Fed policymakers press ahead with inflation fight, even with markets in turmoil\">consumer spending remains robust<\/a>, the growth rate may\u200c decline. However, a reduction in borrowing costs is still expected by June, with \u2063the Federal Reserve having raised its \u2064benchmark overnight rate by 525 basis points since March 2022.<\/p>\n<p>Conclusion:<\/p>\n<p>The modest\u2063 increase in U.S. prices and the consecutive months with inflation\u200c below\u2063 3%\u200b have bolstered\u200c expectations of an interest rate cut by the Federal Reserve. Although the \u2064exact timing of the cut remains uncertain, evidence of\u200c strong consumer spending, rising wages, and increased household savings provides \u200csupport for the overall\u2062 economy. As \u200cthe\u200b U.S. moves forward, sustained efforts\u200b are necessary to ensure that inflation \u2064remains on track \u200dtowards the Federal \u200dReserve&#8217;s\u2063 2% target.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>January 26, 2024 \u2013 6:58 AM PST WASHINGTON (Reuters) \u2013 U.S. inflation remained below 3% for the third consecutive month in December, prompting expectations of interest rate cuts by the Federal Reserve this year. However, the exact timing of the rate cut remains uncertain<\/p>\n","protected":false},"author":1911,"featured_media":2160046,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","fifu_image_alt":"","footnotes":""},"categories":[542],"tags":[],"class_list":["post-2160045","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-oann"],"fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2160045","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/1911"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=2160045"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2160045\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/2160046"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=2160045"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=2160045"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=2160045"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}