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The State of the Economy Thread - “Falling inflation, rising growth give U.S. the world’s best recovery”


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Fed’s favorite inflation gauge shows prices rose at 3.2% annual rate in November, less than expected

 

A gauge the Federal Reserve uses for inflation rose slightly in November and edged closer to the central bank’s goal.

 

The core personal consumption expenditures price index, which excludes volatile food and energy prices, increased 0.1% for the month, and was up 3.2% from a year ago, the Commerce Department reported Friday.

 

Economists surveyed by Dow Jones had been expecting respective rises of 0.1% and 3.3%.

 

On a six-month basis, core PCE increased 1.9%, indicating that if current trends continue the Fed essentially has reached its goal.

 

“Adding in the further sharp slowdown in rent inflation still in the pipeline, it’s hard to see any credible reason why the annual inflation rate won’t also return to the 2% target over the coming months,” wrote Andrew Hunter, deputy chief U.S. economist at Capital Economics.

 

Markets reacted little to the report, with Wall Street set for a mixed open Friday in its last session before the Christmas holiday.

 

Elsewhere in the report, consumer expenditures in November climbed 0.3% while income rose 0.4%, numbers that were in line with expectations and indicative that spending was continuing apace despite ongoing inflation pressures.

 

Including food and energy costs, so-called headline PCE actually fell 0.1% on the month and was up just 2.6% from a year ago, after peaking above 7% in mid-2022. That was the first monthly decline since April 2020, according to Fed data.

 

The 12-month numbers are significant in that both show inflation making continued progress toward the Fed’s 2% target.

 

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32 minutes ago, skinsmarydu said:

 

We split entrees a lot more now because of the amount of food that's served, not the price. After reading the options in the article, restaurants should start reducing portions in general. 

Edited by Hersh
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28 minutes ago, Hersh said:

 

We split entrees a lot more now because of the amount of food that's served, not the price. After reading the options in the article, restaurants should start reducing portions in general. 

 

Read an article about restaurant portions. 

 

The article said that most restaurants, only about 20% of the price goes to pay for the ingredients. 

 

Which means that if the restaurant cuts the portion size in half, the price only goes from $30 to $24. And if you charge somebody $24 for half the food, you'll have a riot. 

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2 hours ago, Larry said:

 

Read an article about restaurant portions. 

 

The article said that most restaurants, only about 20% of the price goes to pay for the ingredients. 

 

Which means that if the restaurant cuts the portion size in half, the price only goes from $30 to $24. And if you charge somebody $24 for half the food, you'll have a riot. 

 

Depends on the quality of the food. 

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