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Inflation-adjusted consumer spending turns in weakest 2-month showing since Hurricane Katrina

Inflation-adjusted consumer spending turns in weakest 2-month showing since Hurricane Katrina

Consumer spending, after adjusting for inflation, was flat for the second straight month in January, raising new concerns about a possible recession in the U.S.
The Commerce Department said Friday that spending posted a 0.4 percent rise in January, which was better than economists had been expecting. However, all of that gain came from a surge in inflation during the month. Taking away the effect of prices, spending showed no gain in January or December.
Other than two negative months in August and September of 2005, which reflected the disruptions from Hurricane Katrina, inflation-adjusted consumer spending has not been so weak since November and December of 2001, when the country was struggling to emerge from the last recession.
Incomes in January posted a 0.3 percent increase following a 0.5 percent gain in December. However, the January performance was boosted by a number of one-time factors, such as big annual bonuses paid to business executives.
A closely watched gauge of inflation that is tied to consumer spending posted a 0.4 percent increase in January and was up 3.7 percent over the past 12 months, the biggest year-over-year gain since 1991.


Updated : 2021-04-11 03:55 GMT+08:00