Economy

U.S. consumer spending increased more than expected in April, boosting the economy's growth prospects for the second quarter, and inflation picked up, which could prompt the Federal Reserve to raise interest rates again next month.

... Consumer spending jumped 0.8% last month after gaining 0.1% in March. Economists polled by Reuters had forecast consumer spending, which accounts for more than two-thirds of U.S. economic activity, would rise 0.4%.

... Adjusting for inflation, consumer spending shot up 0.5% after being unchanged in March.

... [PRICES] The personal consumption expenditures (PCE) price index increased 0.4% in April after rising 0.1% in March. In the 12 months through April, the PCE price index increased 4.4% after advancing 4.2% in March. Food prices were unchanged, while the cost of energy goods and services jumped 0.7%.

Excluding the volatile food and energy components, the PCE price index was up 0.4% after a 0.3% rise in March. The so-called core PCE price index jumped 4.7% on a year-on-year basis in April after gaining 4.6% in the 12 months through March. The Fed tracks the PCE price indexes for its 2% inflation target.