USA-Slowdown in inflation and household spending in April – 05/27/2022 at 16:11

(Updated with details)

WASHINGTON, May 27 (Reuters) – U.S. consumer spending slowed in April but less than expected, while annual inflation appears to have peaked, which could help support economic growth in the second quarter , as fears of a recession grow.

Consumer spending, which accounts for more than two-thirds of U.S. economic activity, rose 0.9% last month, the Commerce Department said Friday after jumping 1.4% (revised) the previous month. .

Economists polled by Reuters on average forecast a 0.7% rise in such spending in April.

That spending is being supported by rising wages as companies scramble to fill a record 11.5 million job vacancies at the end of March.

The Federal Reserve’s monetary policy, which is trying to rein in high inflation and bring it back to its 2% target, has stoked fears of a recession, prompting a sell-off in stocks and higher US Treasury and Treasury yields. of the dollar.

Fears of an economic slowdown have also been heightened by the war in Ukraine, as well as supply chain strains linked to China’s “zero COVID-19” policy.

Growth estimates for the second quarter are generally above a 2.0 annualized rate. The economy contracted at a pace of 1.5% in the January-March quarter, driven by a record trade deficit and a slowdown in inventory accumulation from the strong pace of the fourth trimester.

The core PCE price index, the measure of inflation favored by the US central bank, is up 0.3% month-on-month and 4.9% year-on-year, figures in line with Reuters consensus expectations.

The annual increase in this index is slowing down in particular because the significant gains of the last year are no longer taken into account in the calculation.

(Report Lucia Mutikani; French version Claude Chendjou and Augustin Turpin, edited by Kate Entringer)

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