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Despite strong growth, core inflation normalising

This week’s modest upward revision to third-quarter GDP growth was certainly eye-catching. It suggests that the US economy is not just surviving the surge in interest rates over the last couple of years, but is positively thriving. But the rest of the incoming data points to a sharp slowdown in the fourth quarter and, besides, regardless of the strength of demand the normalisation of supply in goods and labour markets mean that core inflation is nevertheless returning to target.

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