US Economy Continues to Show Strength in January, as Federal Reserve’s Preferred Inflation Gauge and Consumer Spending Both Rise Unexpectedly

The US economy showed continued strength in January, as the Federal Reserve’s preferred inflation gauge and consumer spending both rose unexpectedly.

According to a report from the Commerce Department released on Friday, the Personal Consumption Expenditures (PCE) price index rose 5.4% from a year earlier. This was a higher annual increase than the 5.3% seen in December.

Monthly prices also increased, with the PCE index rising 0.6% from December to January. This was a higher monthly gain than the 0.2% increase seen from November to December.

The Core PCE index, which strips out the often volatile food and energy components, also rose 0.2% from December to January. This was higher than the 0.1% increase seen in December.

Goods prices continued to decline, however, falling 0.7% from the previous month.

The report shows that the US economy remains strong, with consumer spending rising 1.8% last month from December after falling the previous month.

The Federal Reserve is likely to keep raising interest rates in response to the continued price pressures, as inflation remains entrenched in the US economy.