Consumer spending increased in February at a slower pace than expected, decelerating as shoppers curbed spending amid rising inflation, according to the Bureau of Economic Analysis.
Personal consumption expenditures, or PCE, increased by 0.2% to $34.9 billion last month, belows’ forecasts of a 0.7% rise. Adjusted for inflation, spending fell by 0.4%. In January, personal consumption increased 2.1%, or 1.5% adjusted for inflation.
Inflation continued to surge in February, with the PCE price index, the Federal Reserve’s preferred method of measuring inflation, inching up by 0.6% last month for a 6.4% annual increase, in line with economists’ expectations, but the highest since 1982.
Energy prices rose 25.7%, while food prices increased 8%.
Excluding food and energy — two of the most volatile categories — the index rose 0.4% last month and 5.4% year over year, accelerating slower than the consensus yearly rate of 5.5%.
Personal incomes increased by $101.5 billion, or 0.5% last month, in line with expectations, due to an increase in compensation that was partly offset by a decrease in government social benefits. But adjusted for inflation pegged to 2012 dollars, disposable personal income dropped by 0.2%.
The personal savings rate was 6.3%, and personal saving was $1.15 trillion, down from $1.17 trillion in January.
Write to Sabrina Escobar at [email protected]
Credit: www.marketwatch.com /