October 29, 2016
A Washington Post article told readers that the 2.9 percent GDP growth reported for the third quarter made it more likely the Fed would raise interest rates at its December meeting. Part of its story is that inflation is accelerating.
“Inflation remains below the Fed’s target rate of 2 percent but is creeping closer to that level.”
Actually, the opposite is the case. The report (Appendix Table A) showed that the core personal consumption expenditure deflator increased at a 1.7 percent annual rate in the third quarter. That is down from 2.1 percent in the first quarter and 1.8 percent in the second quarter.
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