Lates News

Consumer spending in the United States in January increased slightly higher than expected, coupled with still strong core inflation and the ongoing Middle East war, leading economists to believe that the Federal Reserve will not resume cutting interest rates in the short term. The US Department of Commerce's Bureau of Economic Analysis said on Friday that consumer spending, which accounts for more than two-thirds of economic activity, increased by 0.4% in January, the same as the previous month. The war launched by the United States and Israel against Iran has raised oil prices, which may impact consumption. The war has also caused stock market volatility, with economists warning that the shrinking wealth of high-income families may force some families to reduce spending. Low-income families have already reduced spending due to higher prices from import tariffs. Economists expect this drag to have an impact on the economy in the second quarter. The Personal Consumption Expenditures Price Index (PCE) rose by 0.3% in January, compared to a 0.4% increase in December. The PCE inflation rate for the 12 months ending in January was 2.8%, lower than December's 2.9%. Excluding the more volatile food and energy prices, the core PCE price index rose by 0.4%, the same as in December. Core PCE increased by 3.1% year over year in January, compared to 3.0% in December.