US consumers boosted spending in April as inflation surged, Retail News, ET Retail

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Americans increased their spending by 0.5% in April, a slowdown after a massive gain in March that had been powered by the distribution of billions of dollars in individual stimulus checks.

Even with the pullback from a 4.7% surge in spending in March, the April increase provided further evidence that consumers are driving a strengthening recovery from the pandemic recession. The April gain was led by a 1.1% rise in spending on services, the sector that covers airline travel, hotels and restaurants, areas that were devastated by the pandemic-caused shutdowns a year ago.

Friday’s report also showed that inflation by a measure preferred by the Federal Reserve surged by a bigger-than-expected 3.6% for the 12 months that ended in April. Even excluding the volatile food and energy categories, core inflation over that period was a still high 3.1%.

Both figures are far above the Fed‘s 2% annual inflation target. Yet the current year-over-year inflation figures…

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