It was a far from thrilling report Monday regarding U.S. consumer spending.
The U.S. Commerce Department said the figure rose marginally in February and overall inflation retreated, suggesting the Federal Reserve could take its time in raising interest rates this year despite a tightening labour market.
The department said on Monday that consumer spending edged up 0.1% as households cut back on goods purchases after a downwardly-revised 0.1% gain in January. Consumer spending, which accounts for more than two-thirds of U.S. economic activity, was previously reported to have increased 0.5% in January.
Last month's increase was in line with economists' expectations. When adjusted for inflation, consumer spending rose 0.2%. Inflation-adjusted consumer spending for January was revised down to show it unchanged rather than the 0.4% rise that was previously reported.
That points to some cooling in consumer spending and poses a risk to first-quarter gross domestic product growth estimates, currently at around a 1.5% annualized rate. The economy grew at a 1.4% pace in the fourth quarter.
Inflation moderated last month, with a price index for consumer spending dipping 0.1% after edging up 0.1% in January. In the 12 months through February, the personal consumption expenditures (PCE) price index increased 1% after rising 1.2% in January.
Excluding food and energy, prices gained 0.1% after advancing 0.3% in January. In the 12 months through February, the so-called core PCE price index increased 1.7% after a similar increase in January.
