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U.S. personal spending increases in December, core PCE inches up

Investing.com -

Investing.com -U.S. consumer spending increased in line with forecasts in December, while core PCE prices also ticked up as expected, official data showed on Monday.

In a report, the Commerce Department said that personal spending increased 0.5% in December from the prior month, in line with expectations and compared to a rise of 0.2% in November.

Consumer spending is the single biggest source of U.S. economic growth, accounting for as much as two-thirds of economic activity.

Personal income, meanwhile, rose by a seasonally adjusted 0.3% in December, compared to expectations for a 0.4% advance. That was after rising 0.1% a month earlier.

Real personal consumption rose by a seasonally adjusted 0.3% last month, in line with expectations and compared to November's 0.2% rise, that was revised from an initial increase of 0.1%.

Meanwhile, the core PCE price index rose 0.1% last month, matching expectations and above November's unchanged reading.

The core PCE price index rose at an annualized rate of 1.7% in December, in line with forecasts and the previous month's revised reading (initially 1.6%).

The Federal Reserve uses core PCE as a tool to help determine whether to raise or lower interest rates, with the aim of keeping inflation at a rate of 2% or below.

Immediately following the report, EUR/USD was trading at 1.0639 from around 1.0624 ahead of the release of the data, GBP/USD was at 1.2529 compared to 1.2505 previously, while USD/JPY was at 114.35 from 114.44 earlier.

The US dollar index, which tracks the greenback against a basket of six major rivals, was at 100.82, compared to 100.97 ahead of the report.

Meanwhile, U.S. stock futures pointed to a lower open. The Dow futures fell 0.44%, the S&P 500 futures lost 0.44%, while Nasdaq 100 futures traded down 0.40%.

Elsewhere, in the commodities market, gold futures traded at $1,194.40 a troy ounce, compared to $1,193.55 ahead of the data, while crude oil traded at $53.18 a barrel from $53.13 earlier.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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