Third‑quarter GDP rose 3.4% year‑on‑year, beating forecasts, while the PCE price index showed a 0.5% monthly gain, keeping inflation above the Fed’s 2% target.

U.S. economic activity expanded at a 3.4% annualised rate in the third quarter, outpacing the 3.1% consensus and marking a sharp rebound from the 2.2% pace recorded in Q2. The stronger‑than‑expected growth came alongside a jump in September inflation, with the personal consumption expenditures (PCE) price index rising 0.5% on the month, putting the annual headline rate at 3.6%.

Inflation remains above target

• Headline PCE inflation for September was 3.6% year‑over‑year, well above the Federal Reserve’s 2% goal
• Core PCE, which excludes food and energy, rose 3.1% annually and 0.3% month‑over‑month, matching consensus forecasts
• The monthly PCE gain was the biggest since March, though the annual rate was 0.1 percentage point lower than the Dow Jones estimate

Consumer spending and income

• Consumer spending grew 0.5% in September, slightly under the 0.6% forecast but still indicating resilience
• Personal income rose 0.2%, below the 0.3% expected
• Real sales to private domestic purchasers jumped 4.9% in Q3, accelerating from a 4.6% rise in Q2

What traders are watching next

• Fed officials will assess the data before deciding on the next policy move; the benchmark rate sits at 3.75%‑4%
• Key upcoming releases include the next PCE report and the Fed’s policy statement later this month
• Market participants are also tracking labor market data, especially initial jobless claims, which recently fell to 194,000

Related news

• Gold retreats as US GDP exceeds estimates
• Lagarde steps down early as ECB eyes growth boost
• Bitcoin jumps to $81.5K as US GDP beats expectations
• Gold: Fed hold puts focus on real yields and inflation data

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This article is compiled from international market news for information only. It is not investment advice.