Consumers south of the border increased their spending at the slowest pace in six months last month, while the 12-month rise in consumer prices was the largest in nearly five years.
Figures released Friday the U.S. Commerce Department showed that consumer spending edged up 0.1% in February following a similarly sluggish 0.2% increase in January. The small gains suggest that overall economic growth likely slowed in the first quarter.
Incomes, however, were up a solid 0.4% in February, offering hope for stronger consumer spending in the months ahead.
Meanwhile, an inflation gauge closely watched by the Federal Reserve increased 2.1% in February compared to a year ago. It is the sharpest 12-month rise since March 2012 and slightly above the Fed’s 2% inflation target.
The overall U.S. economy grew at a 2.1% rate in the October-December quarter, supported by a strong gain in consumer spending.
