According to the report of Economy Online; Newly released data from the US economy shows that the country is facing a combination of GDP growth, inflationary pressures and a relatively resilient labor market.
Inflation is higher than the target of the central bank
According to published data, US PCE inflation reached 0.4% monthly and 4.1% annually in May. Core PCE inflation, which is a more important measure for the Federal Reserve, was recorded at 0.3% monthly and 3.4% annually.
While monthly core inflation did not increase significantly, the gap between total inflation and core inflation shows that part of the price pressures could be transferred to the economy from the increase in energy prices due to regional tensions.
The economy is still growing
The third estimate of the US GDP showed that the country experienced a 2.1% growth in the first quarter of 2026. The importance of this matter is because in the second estimate, the growth of the American economy was announced at 1.6 percent. A higher-than-expected reading of this index could strengthen the Federal Reserve’s decisions to move in the direction of tighter policies.
Reduction of unemployment insurance applications
According to data from the US labor market, initial applications for unemployment insurance reached 215,000 in the week ending June 20; A figure that was lower than the market forecast. This data shows that there is no sign of a serious increase in layoffs in the American labor market.
Are the markets ready to increase interest rates?
The collection of these data, along with the statements of Kevin Warsh, the new chairman of the Federal Reserve, show that the path of the US monetary policy will continue to focus on controlling inflation.
Varesh had previously emphasized that the monetary policy should ultimately lead to curbing inflation. The fresh data also showed a lack of serious concern about a recession and a sharp weakening of economic growth, which could lean Federal Reserve policymakers toward keeping interest rates high or considering raising them again.
