The U.S. core personal consumption price index (PCE) grew faster than expected in December, according to data released Friday.
According to a report released by the U.S. Bureau of Economic Analysis, the U.S. personal consumption expenditures (PCE) price index rose slightly year-over-year in December to 1.3% in December from 1.1% in November. On a year-over-year basis, the PCE price index rose to 0.4 percent from 0 percent.
And the core personal consumption price index, the Fed’s favored measure of Inflation, rose 1.5% year-over-year, above market expectations of 1.3% and above the previous value of 1.4%.
The dollar index held near 90.50 after the data was released.
In other sub-data, U.S. personal income increased by 0.6% in December from a year earlier, higher than the expected 0.1% and the previous -1.3%. Personal disposable income increased by 0.6% to $111.6 billion.
The increase in personal income in December primarily reflected increases in government social benefits, compensation and personal dividend income, which were partially offset by a decrease in homeowner income.
Despite the increase in income, U.S. personal spending fell 0.2% in December from a year earlier, the second consecutive monthly decline. spending in November was also revised downward to a 0.7% decline.
On the goods side, spending on both durable goods (mainly recreational goods and vehicles) and nondurable goods (mainly Food and beverages) declined, partially offset by an increase in spending on autos and parts (mainly new light trucks).
On the services side, the most notable decreases were in spending on food services and lodging, and health care, which were partially offset by increases in spending on household utilities (led by electricity).
On a year-over-year basis, consumer spending declined even more sharply, by 2%.
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