The expenditure of consumer of the United States has decreased unexpectedly in January, but an increase in inflation can cover the federal to book the cut of interest rates for some time.
The expenditure for consumers, who represent more than two thirds of the Economic activity of the United States, fell by 0.2% last month, after a revised increase of 0.8% in December, the Economic Analysis Office of the Department of Commerce said on Friday.
The economists consulted by Reuters provided that the consumer expenditure would increase by 0.1% after an increase of 0.7% previously reported in December, when the expenses were guided by purchases in anticipation of the rates that would increase the prices of imported products.
The weakness of January probably reflected the decrease in the stimulus of the first purchases, as well as the weight of cold temperatures out of time and the snow storms that have reached most of the country. The forest fires, which burned areas of Los Angeles, probably also damaged the shopping.
The winter storms interrupted the construction of houses last month and helped reduce employment growth. The data are consistent with the expectations of a slowdown in economic growth in the first quarter. The estimates of gross internal products for the quarter from January to March are mainly lower than an annual rate of 2.0%. The economy grew by 2.3% in the fourth quarter.
In addition to the climate, the government policies of President Donald Trump, including acute rates and cuts, would damage the economic activity.
In his first month in office, Trump issued a series of tariff decrees, imposing a further 10% rate on Chinese products. Thursday, Trump said that a 25% rate on Mexican and Canadian products will come into force on March 4, after being postponed for a month, together with an extra rate of 10% on Chinese imports.
Other rates on motor vehicles in steel, aluminum and imported will soon enter or will be in accelerated development.
Deterioration of trust
The trust of companies and consumers has deteriorated due to the concerns for rates, which should affect the offer and increase costs for both companies and families.
This was reflected in the expectations of the inflation of consumers of one year, which has increased in February and could possibly be transmitted to official data.
The PCE price index increased by 0.3% in January, after an increase of 0.3% not revised in December, in line with the expectations of economists. From 12 months to January, prices increased by 2.5% of 2.6% to December.
Excluding food and energy bird components, the PCE price index increased by 0.3% last month after an increase not available by 0.2% in December. In 12 months until January, the inflation core accumulated 2.6% of 2.9% in December.
The Fed follows PCE price measurements for its 2%inflation objective. Financial markets provide that the Fed will cut the interest rate again in June again. The Central Bank of the United States interrupted the cuts in January, leaving its reference rate in the interval from 4.25% to 4.50%, after reducing it of 100 basis points from September, when it started its locking cycle.
Source: Terra
Rose James is a Gossipify movie and series reviewer known for her in-depth analysis and unique perspective on the latest releases. With a background in film studies, she provides engaging and informative reviews, and keeps readers up to date with industry trends and emerging talents.
-urmctr9cutdl.png "Passengers die pressed between the metro doors in SP")
