January 12, 2018 / 4:50 PM / a year ago

Atlanta Fed raises U.S. fourth quarter 2017 GDP view to 3.3 percent

NEW YORK (Reuters) - The U.S. economy is on track to expand at a 3.3 percent annualized rate in the fourth quarter of 2017 following December data on domestic retail sales and consumer prices, the Atlanta Federal Reserve’s GDPNow forecast model showed on Friday.

The latest figure matched the level set on Dec. 20 in the wake of an industry report that showed home resales in November reached a 5.81 million annualized rate, a near 11-year peak.

Atlanta Fed’s latest estimate for fourth-quarter gross domestic product growth was stronger than the 2.8 percent it calculated on Wednesday.

The latest store sales and consumer inflation data, the regional central bank said, raised its estimate on consumer spending growth to 3.8 percent from 3.0 percent.

Earlier Friday, the government said the core rate on the Consumer Price Index, which is seen as a proxy on underlying inflation trend, grew 0.3 percent in December, which was its steepest monthly increase in 11 months. This brought its year-over-year gain to 1.8 percent.

Federal Reserve policy-makers would like to see core inflation to strengthen to 2 percent.

At the same time, the government reported retail sales rose by 0.4 percent last month, marking an annual increase of 5.4 percent.

Reporting by Richard Leong; Editing by Chizu Nomiyama

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