U.S. consumer spending increased moderately in May and prices rose slightly, pointing to slowing economic growth and benign inflation pressures, which could give the Federal Reserve more ammunition to cut interest rates next month.
CNBC reported that the Commerce Department said consumer spending, which accounts for more than two-thirds of U.S. economic activity, rose 0.4% as households boosted purchases of motor vehicles and spent more at restaurants and on hotel accommodation.
Data for April was revised up to show consumer spending advancing 0.6% instead of the previously reported 0.3% gain. Economists polled by Reuters had forecast consumer spending would rise 0.4% last month.
Consumer prices as measured by the personal consumption expenditures (PCE) price index rose 0.2% last month as a rebound in food prices was tempered by moderate gains in the cost of other goods. The PCE price index increased 0.3% in April.
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