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U.S. consumer spending surges in January; inflation heats up

2023-02-24 22:51:31       source:Reuters

February 24, 2023

WASHINGTON, Feb 24 (Reuters) - U.S. consumer spending increased by the most in nearly two years in January amid a surge in wage gains, while inflation accelerated, adding to financial market fears that the Federal Reserve could continue raising interest rates through summer.

The report from the Commerce Department on Friday was the latest indication that the economy was nowhere near a much- dreaded recession. It joined data earlier this month showing robust job growth in January and the lowest unemployment rate in more than 53 years.

"Clearly, tighter monetary policy has yet to fully impact consumers and shows that the Fed has more work to do in slowing down aggregate demand," said Jeffrey Roach, chief economist at LPL Financial in Charlotte, North Carolina. "This report means that the Fed will likely continue hiking into the summer."

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