WASHINGTON (Reuters) – Americans’ consumer spending rose less than expected in July, but inflation was down, which could allow the Federal Reserve to scale back its interest rate hikes.
Consumer spending, which accounts for more than two-thirds of U.S. economic activity, rose 0.1% last month, the Commerce Department said on Friday. Data for June has been revised down to a 1.0% increase instead of the previously reported 1.1% advance.
Economists polled by Reuters had forecast consumer spending to rise 0.4%.
The personal consumption expenditure (PCE) price index fell 0.1% last month after rising 1.0% in June.
In July, the personal consumption expenditure price index was up 6.3% year-on-year, compared with a 6.8% increase the previous month.
(Report Lucia Mutikani, written by Paul Simao and Nick Zieminski; French version Valentine Baldassari)
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