Investing.com - U.S. personal spending increased more than expected in January, while personal income figures also topped forecasts, official data showed on Monday.
In a report, the Commerce Department said that personal spending rose 0.4% in January, above expectations for an increase of 0.1%. Personal spending for December was revised down to a 0.1% gain from a previously reported increase 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 0.3%, beating expectations for a 0.2% increase, after a flat reading in December.
Meanwhile, the core PCE price index inched up by a seasonally adjusted 0.1% in January, in line with expectations, after rising 0.1% in December.
The core PCE price index rose at an annualized rate of 1.2%, above forecasts for a 1.1% increase, after rising at a rate of 1.1% in December.
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.
Following the release of the data, the U.S. dollar held on to gains against the euro, with EUR/USD shedding 0.21% to trade at 1.3773.
Meanwhile, U.S. stock future indices pointed to a lower open. The Dow Jones Industrial Average futures pointed to loss of 0.75%, S&P 500 futures indicated a decline of 0.85%, while the Nasdaq 100 futures signaled a drop of 0.85%.