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NEW YORK (TheStreet) -- The U.S. economy may be growing at its fastest pace in a decade, but don't expect the Federal Reserve to jump the gun in raising short-term rates.

"I don't think we're there yet," said Ward McCarthy, chief financial economist at Jefferies in an interview with TheStreet.

Though third-quarter GDP rose at a 5% pace, the sharpest growth since 2003, the central bank is mainly focused on full employment, one of its two mandates.

"The Fed made a lot of progress towards the full employment objective, and I think it will probably take until the end of next year until you can objectively look at the labor market and say the Fed has accomplished its mission," McCarthy said.

The other arm of the Fed's dual mandate focuses on inflation. The personal consumption expenditure price index, or PCE, is central banker's preferred inflation gauge. It rose only 1.2% in November year-over-year, compared to a 1.4% rise in October, according to data from the Bureau of Economic Analysis on Tuesday.

"On the inflation side, the Fed is moving in the wrong direction," Ward added. "They haven't hit the target on the PCE deflator since April 2012, so I think the Fed will be patient before they pull the trigger."

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Chris Christopher, director of U.S. consumer economics at IHS Global Insight agrees. "I think the Fed would like to see a higher number and businesses would like to as well, but one interpretation may be that this gives the central bank a little more room before they raise rates."

Not all the economic data was rosy. Durable goods fell 0.7% in November, the third decrease over the last four months, showing weakness in industrials.

"The industrial side of the economy looks increasingly unlikely to be an accelerator for overall real GDP growth in the current quarter," said ITG chief economist Steve Blitz in a note. "There is still the current month left, and with final passage of the extension of various tax breaks dating to 2013, the possibility of a bump up in December spending is possible."

Though McCarthy isn't worried just yet.

"The durable goods orders are the most volatile of all of the economic data out there, so you really need to look at them over a period of time," he added.

-Written by Scott Gamm for TheStreet.

Follow @ScottGamm