US consumer spending falls in December; producer inflation slows down

Consumer spending in the United States will plummet in December, putting the economy on a lower-growth path toward 2023, as inflation continues to decline, which may give the Federal Reserve room to slow further the pace of its price increases. I swear next week.

The expenses of two consumers, who represent more than two thirds of the economic activity of the United States, will fall 0.2% no more than last, said the Department of Commerce at this sixth fair.

The November data were revised lower to show the 0.1% left, versus the previously reported 0.1% advance.

Economists consulted by Reuters project an increase of 0.1% for consumer spending in December.

The data were included in the first report on the Gross Domestic Product of the fourth quarter, released at the fifth fair, which showed that consumer spending remained at a solid growth rate and helped the economy expand at an annualized rate of 2 .9%

The shortfall by 2023 increases the risks of a recession in the second half of the year, but also reduces the need for the US central bank to maintain an excessively aggressive stance in relation to monetary policy.

The Fed’s fastest rate hike cycle since the 1980s fueled the real estate market for a manufacturing recession is in the early stages of a retracement.

The highest loan costs are subject to demand for goods, which tend to be bought on credit. Despite the growth of two expenses with services, this is helping to anchor or consume, some families, especially those with lower income, have exhausted the amount accumulated during the Covid-19 pandemic, limiting or reaching two earnings.

The PCE inflation index rose 0.1% not last month, repeating the rate of November. In the 12 months to December, the PCE price index increased 5.0%, after having advanced 5.5% in November.

Excluding the volatile components of food and energy, the PCE price index rose 0.3%, up from 0.2% in November. The so-called nucleus of the PCE rose 4.4% on an annual basis in December, from 4.7% in November.

The Fed accompanies the PCE price indices for monetary policy decisions. Other measures of inflation also decreased significantly.

Last year, the Fed increased its tax rate by 425 basis points, from quase zero to a range of 4.25%-4.50%, to the highest since the end of 2007. The financial markets reported an increase of 25 points at the meeting of the central bank on January 31 and February 1, according to the CME FedWatch tool.