Investing.com –U.S. consumer spending increased less than forecast in January, though income ticked up, while core inflation missed, official data showed on Wednesday.
In a report, the Commerce Department said that personal spending increased 0.2% in January from the prior month, compared to expectations for a gain of 0.3% and the 0.5% rise in December.
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, compared to expectations for a 0.3% advance. That was after rising 0.3% a month earlier.
Real personal consumption fell by a seasonally adjusted 0.3% last month, missing expectations for a flat reading and compared to December’s 0.3% rise.
Meanwhile, the core PCE price index rose 0.3% in January, above expectations for a 0.2% rise and compared to the gain of 0.1% in the previous month.
The core PCE price index rose at an annualized rate of 1.7% in January, in below forecasts for a 1.8% increase and in line with the previous month’s increase.
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 1.0520 from around 1.0524 ahead of the release of the data, GBP/USD was at 1.2292 compared to 1.2300 previously, while USD/JPY was at 113.93 from 113.89 earlier.
The US dollar index, which tracks the greenback against a basket of six major rivals, was at 101.94, compared to 101.90 ahead of the report.
Meanwhile, U.S. stock futures pointed to a higher open. The blue-chip Dow futures rose 161 points, or 0.77%, the S&P 500 futures gained 16 points, or 0.69%, while the tech-heavy Nasdaq 100 futures advanced 32 points, or 0.60%.
Elsewhere, in the commodities market, gold futures traded at $1,241.95 a troy ounce, compared to $1,241.25 ahead of the data, while crude oil traded at $54.20 a barrel from $54.23 earlier.