US consumer spending is up moderately; inflation accelerates in may

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US consumer spending rose less-than-expected in May amid a shortage of motor vehicles, while higher prices forced cuts in purchases of other goods, another sign that the rebound in economic growth in the early part of the second quarter was waning. losing strength.

Consumer spending, which accounts for more than two-thirds of US economic activity, rose 0.2% last month, the Commerce Department said on Thursday. April’s data was revised to show an increase of 0.6%, up from 0.9% as previously reported.

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Economists polled by Reuters were projecting a 0.4% rise in spending. The report joins data on home construction starts, building permits and industrial production to suggest the economy was struggling to gain strength after gross domestic product fell at an annualized rate of 1.6% in the first quarter.

Slower consumption is likely to be welcomed by the Federal Reserve, which is looking to tame inflation through aggressive monetary policy tightening. The U.S. central bank this month raised its interest rate by 0.75 percentage point, the highest since 1994.

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Inflation continued its upward trend in May. The PCE index rose 0.6% last month after rising 0.2% in April. In the 12 months through May, the PCE registered an increase of 6.3%, repeating the rate of April.

Excluding the volatile food and energy components, the PCE price index rose 0.3% for the fourth consecutive month. The so-called core PCE advanced 4.7% in May in annual terms, after rising 4.9% in April.

Consumer spending continues to be supported by a tight labor market. While job growth is slowing, demand for labor remains strong, with 11.4 million job openings at the end of April.

A separate Labor Department report on Thursday showed that initial claims for unemployment benefits declined by 2,000 to a seasonally adjusted 231,000 in the week ended June 25.

The expectation was 228,000 orders in the last week.

Source: CNN Brasil

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