Inflation retreated further in November and consumers picked up their spending as moods improved, forecasters said, adding to signs that price pressures can be contained without a recession.

  • Economists surveyed by The Wall Street Journal estimate that the core personal-consumption expenditures price index, which excludes volatile food and energy categories, rose 0.1% in November from the previous month, a slowdown from 0.2% in October. That would be the slowest rise since August. On the year, they estimate core inflation cooled to 3.3% in November, from 3.5% in the previous month.
  • Some forecasters see core inflation of 2% on a six-month annualized basis, which matches the Federal Reserve’s inflation target for year-over-year inflation.
  • Consumers likely boosted spending 0.3% in November on the month, following a 0.2% rise in October. Personal income likely rose 0.4%, up from 0.2%. The Commerce Department is set to release the latest data on inflation, personal spending and income Friday at 8:30 a.m. ET. 
  • Separate data Friday from the University of Michigan will show the final reading of December consumer sentiment. A preliminary reading showed a 13% increase from the prior month. 

Americans’ incomes are rising when adjusting for price changes “because of lower inflation, steady job growth and steady wage gains,” said Bernard Yaros, lead U.S. economist at Oxford Economics. “And that bodes favorably for real consumer spending.”

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