Inflación sigue debajo del rango preferido del Fed
Inflation Remains Below Fed’s Target as Officials Meet to Set Policy
Some Fed officials have said they want to see inflation rising toward 2% before raising interest rates again
Harriet TorryOct. 30, 2017 3:50 p.m. ET
A shopper in Salt Lake City. The Fed’s preferred inflation gauge rose 1.6% from a year ago in September, compared with the central bank’s 2% target.
A shopper in Salt Lake City. The Fed’s preferred inflation gauge rose 1.6% from a year ago in September, compared with the central bank’s 2% target. Photo: George Frey/Bloomberg News
By
Harriet Torry
Federal Reserve officials begin their two-day policy meeting Tuesday amid fresh signs that inflation remains lower than they would like, despite strong economic growth.
The Fed’s preferred measure of inflation, the price index for personal-consumption expenditures, rose 1.6% in September from a year earlier, the Commerce Department said Monday. That is up from its 1.4% year-over-year gain in August, but still below the Fed’s 2% annual target.
More important for the Fed, much of the rise in inflation was due to a temporary surge in gasoline prices, not a broader pickup in underlying price pressures. Energy prices rose 6.8% in September from a month before after hurricanes knocked out some U.S. refining capacity.
So-called core prices, which strip out volatile food and energy components, rose just 0.1% in September from August and were up 1.3% on an annual basis for the second month in a row.
Fed officials are likely to leave short-term interest rates unchanged this week and remain on track to consider raising them at their next scheduled meeting, Dec. 12-13.
They have penciled in a rate rise before year’s end, but some officials have said they want to see evidence that inflation is rising toward their 2% target before approving such a move.
Other officials say they should continue raising rates very gradually because they expect inflation to pick up eventually and they don’t want to let the economy overheat. Other recent data show household spending, supported by a strong labor market and upbeat consumer sentiment, is fueling solid growth.
Consumer spending rose a seasonally adjusted 1% in September from August, the largest monthly gain in eight years, the Commerce Department said Monday. Again, the recent hurricanes played a role, driving a 3.2% increase in durable goods—long-lasting products like cars and refrigerators—as many households replaced hurricane-damaged property.
The report echoed an earlier gauge showing strength in consumer outlays. The Commerce Department earlier this month reported that consumer spending at U.S. retail outlets picked up strongly in September, advanced in part by a surge in car purchases and a jump in the cost of gasoline.
The Commerce Department reported Friday that the economy expanded at a strong 3% annual rate in the third quarter, following a 3.1% pace in the second—the best six-month stretch of growth in three years, despite the hurricanes.
“Inflationary pressures are still subdued,” Gregory Daco, an economist at Oxford Economics, said in a note to clients, adding, however, that “since the inflation bar for hikes is now quite low, we still believe the Fed will raise the federal-funds rate in December.”
Write to Harriet Torry at
harriet.torry@wsj.com