US citizens increase consumption
In January, despite persistent inflation, US consumers spent surprisingly more.
Consumer spending rose 1.8% month-on-month in January, the Commerce Department said Friday.
Image: Dustin Chambers/Bloomberg
At the start of the year, US consumers showed themselves to be more generous than in the past, despite persistently high inflation. They increased their spending by 1.8% month-on-month in January, the Commerce Department said on Friday. Economists polled by Reuters had expected a gain of just 1.3%, after a revised 0.1% decline in December. Through their consumption, consumers are the backbone of the American economy. Spending was also pushed up by an 8.7% increase in the cost of living for more than 65 million Social Security recipients. This is the biggest plus since 1981.
Goods and services inflation eased to 6.4% in January from 6.5% in December. This was the seventh consecutive decline and the lowest value since October 2021 at the same time. In the fight against inflation, the US Federal Reserve recently raised interest rates massively. One measure of inflation closely monitored by the US Federal Reserve is personal spending by consumers. This excludes food and energy costs, which vary greatly. The annual inflation rate rose to 4.7% in January, after the core PCE index was revised up to 4.6% in December.
Reuters
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