US consumer spending up slightly, inflation at 4-year high
WASHINGTON — U.S. consumer spending rose at only a sluggish pace in January, even as signs of growing optimism about the economy have emerged.
Consumer spending increased 0.2 per cent in January, after a 0.5 per cent gain in December, the Commerce Department said Wednesday. Spending on services — from haircuts to health care — was flat, and Americans spent less on long-lasting goods such as autos and appliances.
Prices also rose in a sign that inflation has perked up a bit. A measure of inflation closely watched by the Federal Reserve rose 0.4 per cent in January and has increased 1.9 per cent in the past 12 months. That’s the biggest year-over-year gain in more than four years.
That nearly matches the Fed’s target of 2 per cent and may make a rate hike by the Fed more likely this year.