US Economy Grows 3.4% as September PCE Inflation Hits 3.6%

The U.S. economy grew at a 3.4% annual rate in the third quarter, the Bureau of Economic Analysis said Thursday, while its September price gauge showed inflation running at 3.6% from a year earlier.

That pairing reached the Fed one day after it held its benchmark rate at 3.75%-4%. The PCE price index is the central bank's preferred inflation gauge, and it sits well above the 2% target. Rates matter to crypto because Treasury bills pay interest and bitcoin doesn't.

Growth beat the forecast

• GDP rose 3.4%, up from 2.2% in the second quarter, BEA's advance estimate shows. Economists had expected 3.1%, per the Dow Jones consensus cited by CNBC.
• Consumer spending plus private fixed investment rose 4.9%, from 4.6%.
• Personal income rose 0.2% in September.

Prices sped up for the month

The PCE index rose 0.5% in September after 0.3% in August, BEA's income report shows. Core prices, which leave out food and energy, rose 0.3% on the month and 3.1% on the year. The annual headline figure came in 0.1 percentage point below the consensus, and core matched it, CNBC reported.

The quarter looks cooler. Over July through September, PCE prices rose at a 2.1% annual pace, down from 5.0% in the second quarter.

Next on the calendar: BEA's second GDP estimate, due Nov. 25 at 8:30 a.m. ET. Bitcoin was near $81,630 at 11:56 a.m. ET, up 1.5% in 24 hours, per CoinGecko.

In our opinion: Thursday mailed the Fed faster growth and faster monthly price gains in the same envelope. The calmer 2.1% quarterly pace is the counterweight.