Investing.com –U.S. consumer spending increased in line with forecasts in December, while core PCE prices also ticked up as expected, official data showed on Monday.
In a report, the Commerce Department said that personal spending increased 0.5% in December from the prior month, in line with expectations and compared to a rise of 0.2% in November.
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 0.3% in December, compared to expectations for a 0.4% advance. That was after rising 0.1% a month earlier.
Real personal consumption rose by a seasonally adjusted 0.3% last month, in line with expectations and compared to November’s 0.2% rise, that was revised from an initial increase of 0.1%.
Meanwhile, the core PCE price index rose 0.1% last month, matching expectations and above November’s unchanged reading.
The core PCE price index rose at an annualized rate of 1.7% in December, in line with forecasts and the previous month’s revised reading (initially 1.6%).
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.
Immediately following the report, EUR/USD was trading at 1.0639 from around 1.0624 ahead of the release of the data, GBP/USD was at 1.2529 compared to 1.2505 previously, while USD/JPY was at 114.35 from 114.44 earlier.
The US dollar index, which tracks the greenback against a basket of six major rivals, was at 100.82, compared to 100.97 ahead of the report.
Meanwhile, U.S. stock futures pointed to a lower open. The Dow futures fell 0.44%, the S&P 500 futures lost 0.44%, while Nasdaq 100 futures traded down 0.40%.
Elsewhere, in the commodities market, gold futures traded at $1,194.40 a troy ounce, compared to $1,193.55 ahead of the data, while crude oil traded at $53.18 a barrel from $53.13 earlier.