U.S. Inflation Plunges, But Services Costs Still High; Risks Remain Despite Avoided Economic Pitfalls
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U.S. may see largest peacetime inflation drop in history, surpassing 1982's 4% decline. Inflation benefited from supply chain improvements and productivity growth.
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Goods inflation back to deflation, but services inflation still sticky. Housing inflation key for Fed's 2% target.
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Risks remain, like Middle East conflict spreading, more bank turmoil, or faster China slowdown.
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Expected commercial real estate issues haven't materialized as badly as feared.
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Labor force participation higher than expected but will likely drop as population ages.