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U.S. consumer spending barely rose in February amid delays in the payment of income tax refunds, but the biggest annual increase in inflation in nearly five years supported expectations of further interest rate hikes this year.

Reuters reported that the Commerce Department said on Friday (March 31) consumer spending, which accounts for more than two-thirds of U.S. economic activity, edged up 0.1%. That was the smallest gain since August and followed an unrevised 0.2% rise in January.

Economists had expected a 0.2% increase.

The government delayed the issuing of tax refunds this year as part of efforts to combat fraud. Spending last month was held back by a 0.1% dip in purchases of big-ticket items like automobiles. While unseasonably warm weather reduced households’ heating bills, it restricted spending last month.

Weak consumer spending suggested that economic growth slowed further in the first quarter. Gross domestic product increased at a 2.1% annualized rate in the fourth quarter, stepping down from the July-September quarter’s brisk 3.5% pace.

Despite signs of moderate growth, the Federal Reserve is expected to raise interest rates at least twice more this year.

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