Investing.com –U.S. consumer spending increased less than forecast in February, though income rose in line with expectations, while core inflation ticked up, official data showed on Friday.
In a report, the Commerce Department said that personal spending increased 0.1% in February from the prior month, compared to expectations for a gain of 0.2% and the 0.2% rise in January. That was its smallest gain in six months.
Consumer spending is the single biggest source of U.S. economic growth, accounting for as much as two-thirds of economic activity.
Personal income, meanwhile, rose by a seasonally adjusted 0.4% in January, in line with expectations. That was after rising 0.5% a month earlier that was revised up from an initial 0.4% increase.
Meanwhile, the core PCE price index rose 0.2% in February from a month earlier, in line with forecasts and compared to the gain of 0.3% in the first month of the year.
The core PCE price index rose at an annualized rate of 1.8% in February, above forecasts for a 1.7% advance. January’s figure was revised upwards to 1.8% from the prior reading of 1.7%.
The Federal Reserve uses core PCE as a tool to help determine whether to raise or lower interest rates, with the aim of keeping inflation at a rate of 2% or below.
The report also showed that real personal consumption unexpectedly declined by a seasonally adjusted 0.1% last month, missing expectations for a gain of 0.2% and following a drop of 0.2% in January that was revised from an initial decrease of 0.3%
Following the report, EUR/USD was trading at 1.0682 from around 1.0688 ahead of the release of the data, GBP/USD was at 1.2480 compared to 1.2493 previously, while USD/JPY was at 111.90 from 111.83 earlier.
The US dollar index, which tracks the greenback against a basket of six major rivals, was at 100.35, compared to 100.32 ahead of the report.
Meanwhile, U.S. stock futures pointed to a lower open. The Dow futures dipped 6 points, or 0.03%, the S&P 500 futures lost 2 points, or 0.10%, while Nasdaq 100 futures slipped 1 point, or 0.01%.
Elsewhere, in the commodities market, gold futures traded at $1,240.00 a troy ounce, compared to $1,241.20 ahead of the data, while crude oil traded at $50.23 a barrel from $50.17 earlier.