US consumer spending slowed in February and inflation eased
The measure of inflation that the Federal Reserve follows in February rose slightly less than expected, providing some hope that the interest rate increases that the bank has made over the course of its last nine meetings have begun to bear the expected fruits. reduce the price hike.
AndThe Commerce Department said on Friday that consumer spending, which accounts for more than two-thirds of US economic activity, increased 0.2% last month. January data was revised to show spending rising 2% instead of 1.8%, as previously reported.
Economists polled by Archyde.com had expected consumer spending to rise 0.3%. Consumer spending also slowed as income increases eased.
AndThe data came in weaker than expected with energy prices declining by 0.4%, while food prices rose by 0.2%. Goods prices increased by 0.2%, and services prices increased by 0.3%.
With the January data adjusted and the increase last month, consumer spending is heading for higher growth in the first quarter, following it rose at its slowest pace in two and a half years in the October-December quarter, and this helps the economy expand. .
The personal consumption expenditures price index increased 0.3% last month, following rising 0.6% in January. The index rose 5% in the twelve months through February, following posting a 5.3% increase in January.
The personal consumption expenditures index, which excludes volatile food and energy prices, rose 0.3% following increasing 0.5% in January. The so-called core index rose 4.6% year-on-year in February, following rising 4.7% in January.
The core indicator is the Fed’s preferred measure of inflation, with a target of 2%.
The Fed’s unofficial forecasts, released last week, indicated the possibility of another increase this year, and no cut.
But futures and futures market transactions, which the Americans say do not lie, indicate the expectation of cuts this year, with The year-end interest rate is in the range of 4.25% -4.5%, half a point lower than the current range.
Although inflation receded in some sectors, it remained the same in others, as housing costs in particular rose sharply during the recent period.
With all that, inflation is likely to remain well above the Fed’s 2% target through 2024, Fed Chair Jerome Powell said last week.
(Archyde.com, The New Arab)
