The U.S. Department of Commerce announced that the core PCE rose by 2.8% year-on-year in October, reaching a six-month high, indicating that the progress of cooling inflation is stagnating, which may affect the Federal Reserve's interest rate cut pace in December. However, this contrasts with the labor market data, as the number of people continuing to claim unemployment benefits reached a three-year high, adding to the possibility of another rate cut. (Background: Federal Reserve's November FOMC meeting: the pace of rate cuts may slow or even pause, neutral interest rate outlook) (Additional context: Federal Reserve officials support continued interest rate cuts, and Fed hawks have also indicated: a December rate cut is reasonable) The U.S. Department of Commerce announced last night (27th) that the Personal Consumption Expenditures (PCE) index in October increased by 2.3% year-on-year, in line with market expectations and slightly higher than the previous value of 2.1%; it increased by 0.2% month-on-month, consistent with the previous value and also in line with market expectations. However, excluding energy and food, the core PCE price index increased by 2.8% year-on-year, marking the largest increase since April this year, slightly higher than the previous value of 2.7%. Although still in line with market expectations, this data indicates that the cooling of U.S. inflation is stagnating, providing a basis for the Federal Reserve (Fed) to not rush into cutting rates in December. The rise in service prices drove the core PCE up. The increase in the core PCE index was primarily driven by rising service prices. Data shows that the month-on-month growth rate of core service prices in October reached 0.4%, the largest increase since March this year. This growth reflects a surge in portfolio management fees, corresponding with the recent stock market rise. Other data released on the same day also showed economic vitality: personal spending in October increased by 0.4% month-on-month; the annualized quarterly GDP growth rate in the U.S. for the third quarter reached 2.8%, indicating that household and business spending remains resilient. These data support the recent remarks of many Federal Reserve officials, who stated that as long as the labor market remains healthy and the economy develops steadily, there will be no rush to cut rates. On the evening of the 26th, the Federal Reserve's minutes from the November FOMC meeting also emphasized a cautious approach to rate cuts, indicating that they would cut rates "gradually" based on data performance, and if inflation data does not meet expectations, the pace of cuts may slow or even pause. When discussing the prospects of monetary policy, participants expected that if the data aligns with expectations, and inflation continues to decrease to 2% while the economy remains near maximum employment levels, then a "gradual" shift towards a more neutral policy may be appropriate. Extended reading: Federal Reserve's November FOMC meeting: the pace of rate cuts may slow or even pause, neutral interest rate outlook. The number of people continuing to claim unemployment benefits reached a three-year high. However, one data point from the labor market provides a reason for cutting rates. In the past seven days ending November 23, the number of people continuing to claim unemployment benefits increased by 9,000 to 1.907 million, reaching a nearly three-year high. This indicates that many unemployed individuals may face long-term unemployment, reinforcing the view that it is more difficult for job seekers compared to previous high-inflation periods, adding to the possibility of the Federal Reserve cutting rates again in December. Additionally, the number of new unemployment benefit claims decreased by 2,000 to 213,000, lower than the market expectation of 216,000 and below the previous week's 215,000 (revised from 213,000), indicating that while companies are not aggressively hiring, they are also not eager to lay off workers, showing a willingness to retain employees, which helps support stable economic growth in the U.S. and avoid recession. Overall, recent economic data shows that although core inflation pressures persist, the labor market exhibits resilience, and consumer spending continues to support economic growth, suggesting that the U.S. economy may be nearing a "soft landing." Economists are paying attention to Black Friday sales. In the future, economists will closely monitor sales data from "Black Friday" to assess consumer momentum. Retail giants like Target, Best Buy, and Walmart have extended holiday promotions to attract discount-seeking consumers. However, some analysts point out that many consumers rely on credit cards and loans for spending, and there are signs of rising delinquency rates among younger and low-income groups, reflecting increased financial pressure. FedWatch: The probability of a rate cut in December rises to 68%. After the economic data release on Wednesday, the latest data from the Chicago Mercantile Exchange's Fed Watch tool shows that the market slightly increased its bets on a 25 basis point rate cut in December, rising from about 66.6% yesterday to the current 68.2%, while the probability of pausing rate cuts is only 31.8%. At the same time, the market and institutions also predict that the Federal Reserve will slow down the pace of rate cuts next year. Nomura Securities recently projected that the Federal Reserve will pause rate cuts at the December interest rate meeting and will only cut rates by 25 basis points in March and June of 2025; Cathay United Bank's chief economist Lin Qichao stated last week that the Federal Reserve will still cut rates by 25 basis points in December this year, and then again in March and June of next year; Deutsche Bank's chief economist Matthew Luzzetti expects that in December this year, the Federal Reserve will make its last rate cut of 25 basis points, and may pause rate cuts for the entire next year. Related reports: Nomura Securities predicts: Fed will pause rate cuts in December, only two cuts next year... Uncertainty high during Trump's administration. Crypto Weekly: Bitcoin falls back after reaching new highs, Powell not rushing to cut rates. Market sentiment shifts, meme coins booming... Powell hawkish, "not rushing to cut rates," Bitcoin plunges to $86,600, U.S. stocks all down, October PPI shows inflation remains sticky. "Will the U.S. rate cut in December change? October core PCE hits six-month high, focus on Black Friday sales situation" This article was first published on BlockTempo (the most influential blockchain news media).