U.S. consumer spending slows; inflation pushes higher

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.US consumer spending rose at only a sluggish pace in January, even as signs of growing optimism about the economy have emerged. United States consumer spending is likely to remain supported amid promises by the Trump administration of sweeping tax cuts and increased infrastructure spending.Consumer confidence has surged following Trump’s election victory, hitting a 15-1/2-year high in February.The core PCE index, which rose 0.3% in January, has stuck to a narrow range of 1.6% to 1.7% for the past 13 months. That was sharply lower than the 3.5 per cent increase in the third quarter. Lotto winning syndicate come forward to claim massive €12.8m jackpot
In January a work syndicate claimed €88m in a draw after buying their ticket at a service station in Lusk, North Dublin. The largest ever individual victor was Limerick woman Dolores McNamara who walked away with €115m in 2005. Although personal income increased by 0.4% in January, up from 0.3% the previous month, inflation took a big bite out of the spending power of that growth. That was the biggest increase since January 2012 and followed a 0.1% gain in December.The PCE index is the preferred tool for the Federal Reserve to measure inflation.The Fed hiked its key interest rate in December for only the second time since setting an unprecedented near-zero level at the peak of the 2008 financial crisis.The core PCE price index increased 1.7 per cent year-on-year after a similar gain in December. Growth was just 1.9 per cent at an annual pace in the final three months of a year ago, the government said Tuesday.Rising price pressures suggest that consumer spending will probably not provide a big boost to gross domestic product in the first quarter. Interior Secretary Zinke scraps Obama-era ban on lead bullets
His credentials earned him the support of 15 Democrats and numerous conservation groups. The Interior Department oversees 400 million acres of public land, mostly in the West. When adjusted for inflation, consumer spending fell 0.3 percent in January, the first drop since August, after rising 0.3 percent in December.The results indicate less momentum at the start of the quarter, and a pickup in inflation may further limit any acceleration in household spending, which accounts for about 70 percent of the economy.USA consumer spending increased at a 3% annualised rate in the fourth quarter, helping to blunt some of the impact on the economy from a wider trade deficit. Forecasters expect continued steady growth going forward; Macroeconomic Advisers on Tuesday projected a 1.9% GDP growth rate during the first quarter. Incomes rose 0.4 percent, though inflation-adjusted disposable incomes had the biggest drop since 2013.Another report from the Commerce Department today showed construction spending declined 1.0 per cent in January after gaining 0.1 per cent in December. This points to the importance of quicker wage growth which hopefully we soon get even though I’ve been saying that for a while.In January, household outlays on services fell 0.2 percent after adjusting for inflation. Nikkei rallies on Fed news as investors digest Trump’s speech
The Australian dollar dipped slightly against dollar on Tuesday in thin trading as investors awaited a speech by U.S. Dow Jones closed up by 0.57 percent, S&P 500 ended up by 0.65 percent, Nasdaq finished the day up by 0.95 percent.