US Growth Beats Forecasts as Inflation Reaches 3.6%

What was pushing the economy forward?

Consumer spending stayed strong, and businesses continued to invest in artificial intelligence. These helped to offset higher oil prices linked to the conflict in the Middle East.

So people and companies were still spending, despite the higher energy costs. Is this growth rate unusually strong?

It is well above the rate that some Federal Reserve officials consider possible without creating inflation pressure. They put that rate at about 2%. The Federal Reserve is the US central bank.

And price rises were also accelerating. What did the latest figures show?

The consumer price index, which is one measure of inflation, showed that annual inflation rose from 3.4% in August to 3.7% in September. A separate measure, the personal consumption expenditures price index, showed annual inflation at 3.6%.

The Federal Reserve pays close attention to that second index. What else did it tell us?

It showed that prices rose by 0.5% during September. Core inflation, which excludes food and energy prices because they can change sharply, rose to an annual rate of 3.1%.

How did the central bank respond to these numbers?

On Wednesday, the Federal Reserve left its main interest rate in a range between 3.75% and 4%. It said inflation remains elevated. Higher interest rates can reduce inflation, but they can also slow the economy and affect the jobs market.

Do economists expect a change at the next meeting?

Many economists expect the Fed to raise rates in December because inflation is still high. The Fed chair, Kevin Warsh, said economic activity was expanding strongly, while geopolitical developments were still creating uncertainty.

Yet many households appear unhappy about the economy. Why do the official figures and public feeling look so different?

Consumer sentiment has deteriorated sharply. Some economists also warn that large amounts of AI-related investment may mean the strong GDP figure does not show the full condition of the wider economy. The data came less than a week before the midterm elections, which will decide control of Congress.

Thank you, Jack.

Our second story is about a new effort to restart diplomacy between the United States and Iran.

Chloe is LinguaWire's correspondent for world affairs, and she has been covering the latest contacts between the two countries.

Hello, Daniel. US Vice-President JD Vance has sent a personal letter to Mohsen Rezaei, the secretary of Iran's Supreme National Security Council. The letter offers to restart diplomacy at a time of concern about a possible new conflict between the two countries.

What does the letter ask Iran to accept?

It requires Iran to make commitments about its nuclear programme at the start of a process. In return, that process would lead to the opening of the Strait of Hormuz within seven days and to relief from US sanctions.

How did this message come about?

The letter was sent on Sunday after mediation led mainly by Qatar. Iran is expected to reply soon. Vance's return to negotiations is important because he has been sceptical about war, and it suggests that the United States has not abandoned diplomacy.

Why is Iran reluctant to make these commitments at the beginning?

Iran does not want to make commitments that cannot be reversed if US steps, such as lifting sanctions on Iranian oil exports, could later be reversed. One possible commitment would be to export its stockpile of highly enriched uranium to a third country.

So both sides are concerned that the other side could change its position later. Has a way to protect an agreement been discussed?

Yes. A guarantee from a third country has been discussed to make sure both sides follow their commitments. China is often mentioned as the only country with enough status to provide that kind of guarantee.

What has Iran said publicly about its position?

Iran's chief negotiator, Mohammad Ghalibaf, said Iran's conditions had been clearly stated to mediators. He said progress could happen only once Iran's seven conditions had been agreed.

What are some of those conditions?

They include lifting sanctions, ending asset freezes, and ending the war on all fronts. That final condition would require an Israeli ceasefire in Lebanon.

And what is the disagreement over Iran's uranium stockpile?

The US wants early and specific commitments to remove the highly enriched uranium. Iran does not want to lose the bargaining power that stockpile gives it. It is also resistant to the return of UN nuclear inspectors because it fears they could give the US information about the stockpile's location and condition.

Has Iran suggested a different way to deal with the material?

Iran has suggested blending the stockpile down so that it could no longer be used to make a nuclear weapon. Its response to Vance's letter may now help decide whether talks continue or tensions rise again.

Thank you, Chloe.

Part one: vocabulary.

Commitment.

A commitment is a promise or duty to do something; in the story, “It requires Iran to make commitments about its nuclear programme at the start of a process.”

Both countries made a commitment to continue the talks.

Guarantee.

A guarantee is a promise that something will happen or be done; in the story, “A guarantee from a third country has been discussed to make sure both sides follow their commitments.”

The company gave customers a guarantee for one year.

Reluctant.

Reluctant means not willing or eager to do something; in the story, “Why is Iran reluctant to make these commitments at the beginning?”

She was reluctant to speak in front of the class.

Part two: the grammar.

Purpose with so that plus could.

Use “so that + could” to express an intended purpose or desired possible result. Here, Iran suggested an action with the aim that the material could no longer be used for a nuclear weapon.

In the story, “Iran has suggested blending the stockpile down so that it could no longer be used to make a nuclear weapon.”

The city improved its buses so that more people could travel easily.

Repeat after me: Iran has suggested blending the stockpile down so that it could no longer be used to make a nuclear weapon.