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U.S. consumer spending increased more than expected in April, boosting the economy’s growth prospects for the second quarter, and inflation picked up, which could see the Federal Reserve keeping interest rates higher for some time.
Consumer spending jumped 0.8 percent last month, the Commerce Department said on Friday. Data for March was revised up to show spending gaining 0.1 percent instead of being unchanged as previously reported. Economists polled by Reuters had forecast consumer spending, which accounts for more than two-thirds of U.S. economic activity, rising 0.4 percent .
Last month’s surge in consumer spending tempered economists’ expectations for a sharp slowdown this quarter. Though consumer spending accelerated at its fastest pace in nearly two years in the first quarter, much of the growth was concentrated in January.
