Figures released Tuesday, after the Memorial Day long weekend, show U.S. consumer spending recorded its biggest increase in four months in April and monthly inflation rebounded. This could point to firming domestic demand early in the second quarter that could allow the Federal Reserve to raise interest rates next month.
The U.S. Commerce Department said consumer spending, which accounts for more than two-thirds of U.S. economic activity, increased 0.4% last month after an upwardly-revised 0.3% gain in March.
April's hike was the biggest since December and could ease concerns about second-quarter economic growth after weak reports on core capital goods orders, the goods trade deficit and inventory investment in April.
Last month's increase was right in line with economists' expectations, having been initially reported as unchanged in March.
When adjusted for inflation, consumer spending rose 0.2% last month after advancing 0.5% in March.
