The recent pickup in inflation has led some economists to postpone their projections for when the Federal Reserve will begin cutting interest rates.
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The economy keeps growing, defying widespread fears from a year ago that 2023 would bring a recession, a consequence of the much higher borrowing rates the Fed engineered.
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A growing body of analysts and researchers see a pattern of companies using unusual disruptions as an excuse to raise prices for their goods and services, thereby allowing them to expand profit margins.
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The stock market dropped in 2022. So did the unemployment rate. Except in Indiana, where in both cases, the numbers crept up.
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The Federal Reserve has again kept its interest rate at about 4.3%, as the central bank evaluates the impact of the Trump administration’s policies on the economy.
Core prices, which exclude the volatile food and energy categories, had their lowest increase since April 2021.
Consumers are jittery, in part because of fears that new tariffs could worsen inflation. Executives, however, are hopeful about fewer regulations and are planning to boost investments.
Year-over-year consumer price inflation has now risen for four straight months.
Wednesday’s data could strengthen the case for the Federal Reserve to remain in an extended pause mode while the economy is strong and inflation remains elevated.
The Federal Reserve is prepared to keep its key interest rate unchanged for now as inflation remains elevated and the job market is solid, Chair Jerome Powell said Tuesday.
Fed officials have clearly signaled they expect to skip a rate hike, at least in January, to evaluate the job market and economy.
While sales of previously occupied U.S. homes rose in November for the second straight month, the housing market was on track to end 2024 as its worst year for sales since 1995.
The overall increases were slightly less than economists had forecast. U.S. markets leapt higher immediately on the new inflation data.
The U.S. economy in December added the most jobs since March, capping a surprisingly strong year and supporting the case for a pause in Federal Reserve interest-rate cuts.
GDP growth has now topped 2% in eight of the last nine quarters.
New quarterly projections suggest that consumers may not enjoy much lower rates next year for mortgages, auto loans, credit cards and other forms of borrowing.
Americans hoping for lower borrowing costs for homes, credit cards and cars may be disappointed after this week’s Federal Reserve meeting.
Measured from 12 months earlier, wholesale prices climbed 3% in November, the sharpest year-over-year rise since February 2023.
Fueled by pricier used cars, hotel rooms and groceries, inflation in the United States moved slightly higher last month.
Consumer prices rose 2.3% in October from a year earlier. That’s up from 2.1% in September, although it’s still only modestly above the Fed’s 2% target.
Even if inflation continued declining to the Fed’s 2% target, officials said, “it would likely be appropriate to move gradually” in lowering rates, according to minutes of the November 6-7 meeting.
The U.S. economy is strong and should continue to grow next year, Fifth Third Bank Chief Investment Strategist Tom Jalics said at IBJ’s 2025 Economic Forecast breakfast Thursday.
One cautionary note is that grocery-store sales barely rose last month, a sign that many Americans might still be struggling to adapt to food prices that are still much higher than they were three years ago.
After Powell’s cautious remarks Thursday, traders estimated the likelihood of a Federal Reserve rate cut in December at just below 59%, down from 83% a day earlier.
