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The Fed’s job did not just get easier 

Author: Content Editor
The Fed’s job did not just get easier 
The latest personal consumer expenditures data shows that the Fed's preferred inflation gauge slightly declined in January, indicating that the 2% inflation target is still far away. Decreased consumer spending and significant income growth complicate the central bank's mandate and pose challenges for economic expansion. The PCE index rose 2.5% annually in January, down from 2.6% in December, while core PCE, which excludes food and energy costs, declined to 2.6%. Personal income increased by 0.9% month over month, led by private wages and salaries. However, consumer spending decreased in January, particularly in sectors like motor vehicles, household furnishings, and recreational goods. As a result, expectations for Q1 GDP outlook have significantly lowered, with the Atlanta Fed's GDPNow model projecting a 1.5% contraction during the first three months of 2025, contrasting with the previous prediction of a 2.3% expansion.

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