U.S. consumer spending increase strongest in over six years
The Commerce Department said consumer spending, which accounts for more than two-thirds of U.S. economic activity, improved 1 percent last month as households bought a range of goods and services.
Last month's increase was the largest since August 2009 and beat economists' expectations for a 0.7 percent rise.
Strong consumption lifted inflation last month. The personal consumption expenditures (PCE) price index, excluding the volatile food and energy components, rose 0.2 percent after edging up 0.1 percent in March. That left the increase in the year-on-year core PCE rate at 1.6 percent.
The core PCE is the Fed's preferred inflation measure and is running below its 2 percent target. Economists expect inflation to continue creeping higher this year, citing the dollar's fading rally and a gradual increase in oil prices and wages. ■