April 28, 2023

WASHINGTON, April 28 (Reuters) - U.S. consumer spending was unchanged in March as an increase in outlays on services was offset by a decline goods, but persistent strength in underlying inflation pressures could see the Federal Reserve raising interest rates again next week.

Stubbornly high inflation was underscored by other data on Friday showing labor costs increasing solidly in the first quarter as a tight labor market continued to drive wage gains in the private sector. With the economy, however, shifting to lower gear, the anticipated rate hike next Wednesday will probably be the last in the current cycle.

Tighter credit conditions following recent financial market turmoil have added to the risks of a recession later this year. A fight to raise the federal government's $31.4 trillion borrowing cap also poses a threat to the economy.

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