Fed’s preferred inflation gauge rose in September as third-quarter GDP beats expectations

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   Inflation Rises in September as GDP Beats Expectations

   The Federal Reserve's preferred inflation gauge moved higher in September, drifting further from the central bank's target while core inflation rose by 3.1%. Simultaneously, the Bureau of Economic Analysis reports that third-quarter gross domestic product grew at a faster-than-expected rate of 3.4%. The stronger economic growth paired with lingering price pressures arrives days before midterm elections where the cost of living dominates public attention. Meanwhile, real consumer spending stalled during the period, highlighting strains on household budgets despite robust overall economic expansion.

   Why it matters

   These economic figures provide the final snapshot of the United States economy prior to the midterm elections. Investors and policymakers closely monitor the personal consumption expenditures price index to gauge long-term price stability. The combined data of higher inflation and strong GDP output complicates future monetary policy decisions for the central bank as it evaluates benchmark interest rates.

   What is confirmed

   • Core inflation rose by 3.1% in September.
   • Gross domestic product for the third quarter grew by 3.4% according to the Bureau of Economic Analysis.
   • The Commerce Department released the Federal Reserve's preferred inflation gauge showing inflation trended higher in September.

   Still unconfirmed

   • Prices ticked higher in September, keeping expectations active for a year-end Federal Reserve rate hike.

   What to watch next

   • Upcoming jobs report and midterm election results
   Sources used for this update (25)

   1. www.foxbusiness.com — Great Business Leaders in America & Around the World | Fox Business
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   3. pro.thestreet.com — The Fed Holds, Oracle Jumps, Chips Rise for Fourth Session but Alphabet Sinks After Hours
   4. Fox Business — Fed's favored inflation gauge trended higher in September
   5. CNN — Last snapshot of the US economy before midterms shows stronger growth but higher inflation | CNN Business
   6. Fox Business — Fed’s preferred inflation gauge rose in September as third-quarter GDP beats expectations
   7. Investor's Business Daily — Stock Market Today: Nasdaq Sells Off After Inflation Data; Alphabet Plummets On Earnings (Live Coverage)
   8. The New York Times — Inflation Accelerated in October, PCE Index Shows
   9. Yahoo Finance — PCE inflation: Prices ticked higher in September, keeping expectations for a year-end Fed hike
   10. Pittsburgh Post-Gazette — Inflation heats up again, data shows, days before midterm elections where cost of living dominates
   11. PBS — Inflation heats up again, days before midterm elections
   12. www.cnbc.com — PCE inflation report September 2026: - CNBC
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