Consumer spending on the other side of the border rose less than expected to begin 2017, as the largest monthly increase in inflation in four years eroded households' purchasing power, pointing to only moderate economic growth in the first quarter.
Figures released Wednesday by the U.S. Commerce Department revealed that consumer spending, which accounts for more than two-thirds of U.S. economic activity, increased 0.2% after an unrevised 0.5% rise in December.
Economists had forecast consumer spending gaining 0.3% in January. Consumer spending is likely to remain supported amid promises by the Trump administration of sweeping tax cuts and increased infrastructure spending.
In a speech to Congress on Tuesday night, President Donald Trump said his economic team was working on a "historic tax reform that will reduce the tax rate on our companies" and promised a "massive" tax relief for the middle class, but offered no further details.
Consumer confidence has surged following Trump's election victory, hitting a 15-1/2-year high in February.
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