Investing.com –U.S. consumer spending and income increased in line with forecasts in April, while annualized core inflation also matched expectations, official data showed on Friday.
In a report, the Commerce Department said that personal spending increased 0.4% in April from the prior month, in line with expectations and the higher than March’s 0.3% gain that was revised up from a flat reading.
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 April,. That was also in line with expectations and compared to the prior month’s 0.2% increase.
Meanwhile, the core PCE price index rose 0.2% in April from a month earlier, compared to a forecast for a 0.1% rise and the previous 0.1% decline.
The core PCE price index rose at an annualized rate of 1.5% in April, in line with forecasts but slightly below the prior reading of 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.
The report also showed that real personal consumption rose by a seasonally adjusted 0.2% last month, matching expectations and following an increase of 0.5% in March that was revised from an initial advance of 0.3%.
Following the report, EUR/USD was trading at 1.1161 from around 1.1165 ahead of the release of the data, GBP/USD was at 1.2868 compared to 1.2867 previously, while USD/JPY was at 111.17 from 110.99 earlier.
The US dollar index, which tracks the greenback against a basket of six major rivals, was at 97.42, compared to 97.36 ahead of the report.
Meanwhile, U.S. stock futures pointed to a lower open. The Dow futures lost 28 points, or 0.13%, the S&P 500 futures fell 4 points, or 0.17%, while Nasdaq 100 futures traded down 6 points, or 0.11%.
Elsewhere, in the commodities market, gold futures traded at $1,266.66 a troy ounce, compared to $1,260.19 ahead of the data, while crude oil traded at $49.43 a barrel from $49.41 earlier.