“The data have been better than the Fed would have thought but nothing outside of the box of 2% GDP growth,” said Stuart Hoffman, chief economist at PNC Financial Services Group Inc. in Pittsburgh. “The traditional fiscal drag is dissipating and the private sector is pushing the economy forward.”
The FOMC has held its main rate near zero since December 2008 and pledged to keep it there as long as the unemployment rate exceeds 6.5% and the outlook for inflation isn’t above 2.5%.
The consumer-price index declined in October for the first time in six months, showing inflation remains below the Fed’s 2% goal. The gauge dropped 0.1%, reflecting cheaper energy, clothing and new cars. Overall consumer prices increased 1% in the 12 months ended in October, after a 1.2% year-over-year gain the prior month.
McDonald’s Corp., the world’s largest restaurant chain, said it’s making changes that are attracting more customers from rivals amid elevated joblessness. The Oak Brook, Illinois-based company said last month sales at U.S. stores open at least 13 months rose 0.7% in the third-quarter.
“Unemployment remains at higher than desirable levels and retailers are battling for greater portion of a smaller pie,” Chief Executive Officer Don Thompson told investors Nov. 14. “Competition remains intense and we are making adjustments as we strive to better understand these shifting dynamics and their impact on our business.”
Fed Vice Chairman Janet Yellen, a main architect of stimulus that’s pushed the central bank’s balance sheet to a record $3.91 trillion, has been nominated to succeed Chairman Ben S. Bernanke. His term expires Jan. 31.
Yellen indicated in her Nov. 14 Senate confirmation hearing she’ll press on with the unprecedented monetary stimulus until she sees a robust recovery, downplaying risks the policy is inflating asset bubbles. Asked about stock prices, Yellen said she doesn’t see “bubble-like conditions.”
Copyright 2014 Bloomberg. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.