US consumer spending better than anticipated as inflation hots up

The report underscores the robustness of consumer demand and reflects the temporary, but relatively subdued, impact from the omicron wave on outlays

Federal Reserve chairman Jerome Powell. The latest hot inflation print further validates Fed officials’ calls to begin raising interest rates at their March policy meeting and could potentially lend support to a half percentage-point hike, rather than a quarter-point.

US inflation-adjusted consumer spending advanced by more than expected in January, highlighting the resilience of American demand despite a surge in Covid-19 cases and prices rising by triple the Federal Reserve’s target.

Purchases of goods and services, adjusted for changes in prices, increased 1.5% from December, the US Commerce Department said.