US consumer spending rose 3.8% annualized in Q3 while inflation expectations among firms held above 3%

Advance Bureau of Economic Analysis data released in October recorded the third consecutive quarter of above-trend consumer outlays, driven by services and non-durable goods. The same release showed the core PCE price index rising 2.7% year-over-year, unchanged from the prior quarter. Corporate commentary compiled by the Federal Reserve’s Beige Book noted repeated references to cost pass-through and reluctance to accept margin compression. These figures arrive against the backdrop of the November 2024 election outcome and the prospect of renewed tariff schedules on imported intermediates. Higher duties would raise input prices for domestic manufacturers while simultaneously supporting nominal wage growth through tighter labor markets, producing opposing effects on measured inflation. Market pricing for the federal-funds rate now embeds only two 25-basis-point cuts through mid-2025, down from four priced in September.