WASHINGTON (Reuters) – U.S. consumer spending rose only marginally in February, likely to offset the previous month’s rise, and inflation showed signs of slowing but remained elevated, which could get the Federal Reserve (Fed) to raise interest rates again this year.
Consumer spending, which accounts for more than two-thirds of U.S. economic activity, rose 0.2% last month, the Commerce Department said on Friday.
Economists polled by Reuters had expected a slightly more marked increase of 0.3%.
Data for January has been revised upwards and shows spending rose 2.0% instead of 1.8% as previously reported.
The Personal Consumption Expenditure (PCE) price index – a measure of inflation closely tracked by the Fed – rose 0.3% last month after accelerating 0.6% in January.
Year on year, the PCE price index rose 5.0% after rising 5.3% in January.
Excluding the volatile components of food and energy, the so-called “core” PCE price index rose 0.3% over one month after rising 0.5% in January.
Over one year, the “core” PCE price index rose by 4.6% in February, after +4.7% in January.
Economists had forecast a rise in the PCE “core” index of 0.4% over one month and 4.7% over one year.
(Report Lucia Mutikani; French version Nathan Vifflin, edited by Blandine Hénault)
Copyright © 2023 Thomson Reuters