Consumer Spending Rises Amid Persistently High Inflation Ahead of Iran Conflict

In February, U.S. consumer spending increased by 0.5%, up from 0.3% in January, despite ongoing inflation concerns. The personal consumption expenditures (PCE) price index rose by 0.4%, maintaining an annual rate of 2.8%. Excluding volatile food and energy prices, the core PCE also rose by 0.4%, with an annual rate of 3%. Economists had anticipated a lower overall inflation increase of 0.3%. Additionally, the U.S. economy's growth rate was revised down to 0.5% for the last quarter of 2022, indicating weaker business investment. With rising inflation expected due to potential disruptions from the impending conflict with Iran, the Federal Reserve may be less inclined to lower interest rates in the near future.

Key Details: • Consumer spending rose 0.5% in February. • PCE price index increased by 0.4%, annual rate at 2.8%. • Core PCE also up 0.4%, annual rate at 3%. • U.S. GDP growth revised down to 0.5% for Q4 2022. • Inflation expected to rise due to potential conflict impacts.