WASHINGTON (Reuters) - U.S. consumer spending increased by the most in more than 9-1/2 years in March as households stepped up purchases of motor vehicles, but price pressures remained muted, with a key inflation measure posting its smallest annual gain in 14 months.
The surge in consumer spending reported by the Commerce Department on Monday sets a stronger base for growth in consumption heading into the second quarter after it slowed sharply in the first three months of the year.
It further allayed concerns about the economy’s health, which had been brought to the fore by a temporary inversion of the U.S. Treasury yield curve last month. Tame inflation, however, supported the Federal Reserve’s recent decision to suspend further interest rate increases this year.
The surge in consumer spending reported by the Commerce Department on Monday sets a stronger base for growth in consumption heading into the second quarter after it slowed sharply in the first three months of the year.
It further allayed concerns about the economy’s health, which had been brought to the fore by a temporary inversion of the U.S. Treasury yield curve last month. Tame inflation, however, supported the Federal Reserve’s recent decision to suspend further interest rate increases this year.