Consumer spending rebounded in February, but inflation is still above target

Americans increased their spending last month after taking a breather in January, while inflation was a mixed bag, new Commerce Department data showed Friday.

Americans increased their spending last month after taking a breather in January, while inflation was a mixed bag, new Commerce Department data showed Friday. As it stood in February, America’s economic foundation remained fairly solid. However, the latest data doesn’t include the elephant in the room: President Donald Trump’s aggressive trade policy. Recently imposed tariffs on auto imports and a looming slew of other levies stand to ding America’s economic engine and drive prices higher, economists warn. The Personal Consumption Expenditures price index rose 2.5% in February from the year before, holding steady with what was seen in January, according to Commerce Department data released Friday. On a monthly basis, prices rose 0.3%, unchanged from January. Economists expected that falling energy prices and stabilizing food prices would help keep the disinflationary trend at hand, and that was indeed the case: Energy prices fell 1.1% for the month while food prices eased just slightly to 1.5% from 1.6%. Forecasts called for the PCE price index to be unchanged from January’s preliminary 2.5% rate.