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U.S. personal spending flat in April, income rises 0.4%

Published 06/01/2015, 08:33 AM
© Reuters. U.S. personal spending flat in April, income rises 0.4%
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Investing.com - U.S. personal spending was unexpectedly flat in April, while personal income topped expectations, official data showed on Monday.

In a report, the Commerce Department said that personal spending was unchanged in April, compared to expectations for a gain of 0.2%. Personal spending rose 0.5% in March, whose figure was revised up from a previously reported gain of 0.4%.

Consumer spending is the single biggest source of U.S. economic growth, accounting for as much as two-thirds of economic activity.

The report also showed personal income rose by a seasonally adjusted 0.4% in April, above forecasts for a 0.3% increase and after holding flat in March.

Meanwhile, the core PCE price index inched up 0.1% in April, below expectations for 0.2% and after rising 0.1% in March. The core PCE price index rose at an annualized rate of 1.2%, down from a 1.3% gain in March and compared to forecasts of 1.3%.

The Federal Reserve uses core PCE as a tool to help determine whether to raise or lower interest rates, with the aim of keeping inflation at a rate of 2% or below.

EUR/USD was trading at 1.0958 from around 1.0943 ahead of the release of the data, GBP/USD was at 1.5238 from 1.5222 earlier, while USD/JPY was at 123.97 from 124.11 earlier.

The US dollar index, which tracks the greenback against a basket of six major rivals, was at 97.18, compared to 97.33 ahead of the report.

Meanwhile, U.S. stock futures pointed to a higher open. The Dow futures pointed to a gain of 0.4%, the S&P 500 futures advanced 0.3%, while the Nasdaq 100 futures rose 0.5%.

Elsewhere, in the commodities market, gold futures traded at $1,188.40 a troy ounce, compared to $1,185.50 ahead of the data, while crude oil traded at $60.02 a barrel from $59.89 earlier.

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