Published:
U.S. inflation stepped up in September; GDP growth accelerates to 3.4% annualised (CNBC citing Commerce reports)
CNBC reports that the PCE price index rose 0.5% in September (3.6% y/y) with core PCE up 0.3% m/m (3.1% y/y), alongside stronger-than-expected Q3 GDP growth of 3.4% annualised; consumer spending and income remain resilient.
CNBC, citing Commerce Department data, says US inflation accelerated in September, with the PCE price index rising 0.5% for the month and 3.6% year-on-year. The publication also notes that core PCE—excluding food and energy—was up 0.3% month-on-month and 3.1% year-on-year, which it frames as the measure officials tend to treat as more informative about longer-run inflation trends.
The same set of reports is described as showing a firm growth backdrop. Real GDP is reported to have increased at a 3.4% seasonally adjusted annualised pace in Q3, ahead of the prior quarter’s 2.2% and above the estimate referenced in the story. CNBC attributes the stronger growth to higher investment, consumer spending and government spending, while imports rose and exports were lower.
On the demand side, consumer spending is described as resilient in September, rising 0.5% (below the specific forecast figure cited in the story) alongside personal income growth of 0.2%. CNBC places these data against the context of the prior Fed decision to hold the benchmark rate in a 3.75%-4% range, while emphasising that officials said they can evaluate incoming information before the next move.
For FX traders, the key “watch next” is whether incoming inflation prints show any sustained re-anchoring closer to the Fed’s 2% target, or whether core inflation continues to run hot even as growth stays solid. That mix is what typically drives changes in rate-expectations and, in turn, USD pricing.
Why this matters for FX
This package matters because it links near-term demand and inflation momentum in the US. Stronger Q3 GDP alongside elevated (not yet target-consistent) PCE inflation supports the case that US policy rates may need to stay restrictive for longer, which typically affects FX through US interest-rate expectations and broader financial conditions. The report also signals how much of inflation persistence may be contained in core versus energy-sensitive categories, which can shape the timing of any easing expectations.