The final reading for second-quarter Gross Domestic Product showed the U.S. economy expanded by 2.2%, surpassing both the initial 1.5% estimate and the 2.1% growth recorded in the first quarter. Alongside the expansion, the GDP Price Index rose 6.1%, signaling a cooling trend that fell short of the 6.4% expected by economists.

August PCE data provided further insight into the inflationary environment. Core PCE, the Federal Reserve’s preferred gauge, rose 0.2%—a more modest increase than the 0.3% consensus forecast. On an annual basis, core inflation reached 3.0%, notably lower than the 3.3% anticipated by analysts. Headline inflation also remained muted at 3.4% over the 12 months ending in August, below the expected 3.7%.

Consumer behavior remains a critical component of the current economic picture. While personal income growth slowed to 0.2% in August, spending increased by 0.9%, significantly outpacing the 0.8% forecast. This robust spending suggests that households possess enough financial resilience to navigate ongoing price pressures, providing a complex backdrop for the central bank’s future policy decisions.