The U.S. Department of Commerce reported a slowdown in inflation as the Personal Consumption Expenditures (PCE) price index unexpectedly cooled in November. This data alleviated some investor concerns about fewer rate cuts next year. Following the release, spot gold briefly surged past $2,610, and U.S. stock futures rose but did not turn positive.
November's overall PCE index rose 2.4% year-over-year, slightly below the expected 2.5%. Monthly growth was 0.1%, marking the lowest since May. Core PCE, excluding food and energy, increased 2.8% annually, with a monthly rise of 0.1%.
Consumer spending, accounting for over two-thirds of U.S. economic activity, grew by 0.4% month-over-month, fueling a 3.1% annualized GDP growth in Q3. The Atlanta Fed forecasts a 3.2% GDP increase in Q4. The Federal Reserve recently cut rates by 25 basis points, signaling cautious future rate cuts.
