Investing.com - U.S. consumer spending rose less than expected in July, while core PCE prices inched up tepidly, dampening the case for the Federal Reserve cover to raise interest rates again this year.
The Commerce Department said that personal spending increased by 0.3% in July, below expectations for a gain of 0.4% and after rising 0.2% a month earlier.
Consumer spending is the single biggest source of U.S. economic growth, accounting for as much as two-thirds of economic activity.
Personal income, meanwhile, rose by 0.4%, compared to forecasts for a gain of 0.3% and following a flat reading in June.
The data also showed that the core PCE price index inched up 0.1% last month, matching expectations. On an annualized basis, core PCE prices rose 1.4%, in line with forecasts.
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.
USD/JPY was at 110.48 from around 110.62 ahead of the release of the data, EUR/USD was trading at 1.1842 from 1.1833 earlier, while GBP/USD was at 1.2865 from 1.2858.
The US dollar index, which tracks the greenback against a basket of six major rivals, was at 93.14, compared to 93.25 ahead of the report.
Meanwhile, U.S. stock futures pointed to a modestly higher open. The blue-chip Dow futures rose 52 points, or 0.2%, the S&P 500 futures tacked on 5 points, or 0.2%, while the tech-heavy Nasdaq 100 futures advanced 11 points, or 0.2%.
Elsewhere, in the commodities market, gold futures traded at $1,315.36 a troy ounce, compared to $1,311.49 ahead of the data, while crude oil traded at $46.05 a barrel from $46.02 earlier.