USA: Household consumption exceeds expectations, inflation is accelerating!


WASHINGTON, May 26 (Reuters – U.S. household spending rose more than expected in April, bolstering growth prospects for the world’s largest economy in the second quarter, and inflation picked up, which could lead the Federal Reserve maintain high interest rates for some time.

Consumer spending, which accounts for more than two-thirds of U.S. economic activity, rose 0.8% in adjusted data last month, the Commerce Department said on Friday.

Economists polled by Reuters on average had expected a lower rise of 0.4%.

Data for March have been revised upwards to show an increase of 0.1%, instead of the stagnation initially announced.

The increase in consumer spending in April tempers economists’ expectations of a sharp slowdown in the economy for the current quarter. Although spending accelerated to its fastest pace in nearly two years in the first quarter, most of the growth was concentrated in January.

Households curbed spending in February and March due to inflation, cuts in government social benefits and a drop in savings accumulated during the COVID-19 pandemic.

The PCE consumer price index increased by 0.4% in April after +0.1% in March. Its increase over one year was 4.4% after +4.2%.

The Federal Reserve’s closely watched core PCE inflation index, which excludes volatile energy and food items, rose 0.4% after rising 0.3% in March. Over one year, its increase was 4.7%, against 4.6% a month earlier. (Report by Lucia Mutikani; French version Gaëlle Sheehan, edited by Laetitia Volga)












©2023 Thomson Reuters, all rights reserved. Reuters content is the intellectual property of Thomson Reuters or its third party content providers. Any copying, republication or redistribution of Reuters content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters. Thomson Reuters shall not be liable for any errors or delays in content, or for any actions taken in reliance thereon. “Reuters” and the Reuters Logo are trademarks of Thomson Reuters and its affiliated companies.



Source link -87