The US dollar index inched up to 102.2 on Thursday after data pointed to resilient economic growth and stubborn inflation. Annual headline PCE inflation quickened to 3.6% in September, while the core measure rose to 3.1%, with both readings remaining above the Federal Reserve’s 2% target.
At the same time, US GDP grew at a 3.4% annualized pace in the third quarter, beating expectations of 3.1% and accelerating from 2.2% in the previous period. The expansion was driven by solid consumer spending and a sharp rise in private investment, especially in equipment and intellectual property related to artificial intelligence.
Even so, quarterly PCE inflation moderated relative to the second quarter, providing some tentative relief. Consumer spending climbed 0.5% in September, while initial jobless claims declined to 194,000, underscoring ongoing labor market strength.
After the Fed opted to leave interest rates unchanged at 3.75%–4%, policymakers are now expected to closely monitor incoming data before deciding on their next policy steps.